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Student Loan Lawsuits

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Why you might be sued over a student loan

Federal student loans rarely end up in court because the government can collect administratively. Private student loans, on the other hand, must go through the civil court system to recover money. Once you fall behind for several months, lenders often sell your account to a debt buyer or collection law firm that specializes in lawsuits.
These cases can move fast. Ignoring the paperwork means an automatic judgment against you — allowing wage garnishment, bank levies, or property liens later. The good news: many of these lawsuits are defensible, and some can be dismissed entirely when the collector lacks proper documentation.

How to identify a real lawsuit

A legitimate lawsuit will include a Summons and Complaint served in person or by certified mail. It will list a case number, court name, and plaintiff (the lender or debt buyer). Common plaintiffs include National Collegiate Student Loan Trust, Navient, AES, Citizens Bank, and various “LLC” debt buyers. If the papers were taped to your door, mailed from an unknown address, or demand payment without an official case number, verify legitimacy before responding. Fake lawsuits are common scare tactics used by rogue collectors.

The deadlines you can’t ignore

Once you are served, you typically have 20–30 days (depending on your state) to file an Answer. Missing that window allows the collector to obtain a default judgment, which gives them access to your paycheck or bank accounts. Our attorneys prepare and file your response, forcing the creditor to produce the original promissory note, payment history, and chain of assignment. Many debt buyers cannot meet that burden. When they fail, the case collapses.

Common defenses that work

  • Lack of proof of ownership: Debt buyers must show a clear transfer chain from the original lender.
  • Improper service: If you were not served correctly, the case can be dismissed.
  • Expired statute of limitations: Each state limits how long a creditor can sue. If that time has passed, you can win dismissal.
  • Payment errors or discharge: You can present proof that the balance was already paid, discharged, or settled.
  • Lack of standing: If the plaintiff cannot prove they own the note, they cannot collect.
These defenses aren’t technicalities — they are your rights under civil and consumer law.

How Consumer Rights Law Firm defends you

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  • What happens if the lender wins

    If the lender obtains a judgment, they can garnish wages, levy bank accounts, or place liens on property. Judgments can also accrue interest and appear on your credit report for seven years or more. Even after judgment, we can often negotiate settlements that stop active enforcement and remove liens once paid.

  • Settlement and negotiation options

    Many private lenders are open to settlement once a lawsuit is filed because litigation is expensive. We negotiate directly with the plaintiff’s attorneys to reduce the balance, waive fees, and confirm the debt is reported as “settled in full.” Every settlement is reviewed for legality and accuracy to protect you from future collection attempts on the same account.

  • What if the loan was co-signed

    If a parent or relative co-signed your loan, they can be sued too. However, if the primary borrower qualifies for a settlement, we often negotiate a co-signer release as part of the agreement. Co-signers should respond to lawsuits as well — ignoring them can still lead to default judgments.

  • What not to do

    - Don’t ignore court papers.
    - Don’t call the plaintiff’s attorney to “explain” — they represent the lender, not you.
    - Don’t agree to a payment plan without reviewing the lawsuit first.
    - Don’t assume you owe the full amount stated; added interest and fees may be wrong.

Frequently Asked Questions

Generally no, because the government uses administrative collection tools instead. Lawsuits usually involve private student loans. See also: Federal Student Loan Default Guide and Administrative Wage Garnishment.
You may be able to file a motion to vacate if you were not properly served or didn’t receive notice. Courts often reopen cases for that reason. See also: How to Read a Garnishment Notice.
They can try, but they must prove ownership with a full chain of assignment. If they can’t, the case can be dismissed. See also: Private Student Loan Default Guide.
In most states, judgments remain enforceable for 7–10 years and can often be renewed. We negotiate to satisfy or settle judgments before that happens. See also: Rehabilitation vs Consolidation.

That depends on the documentation the lender has and your financial goals. We review both options with you before you decide.
See also: Debt Validation Letters That Work.

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