If you’re being sued for student loans, don’t panic. There’s a well-established procedure that can help you deal with the fallout.
Here’s what you need to do if you’re being sued for your student loans:
Get background information.
Speak with a student loan lawyer.
Answer the lawsuit.
Head to court.
Take a deep breath and tackle this one step at a time. One of the biggest mistakes I see borrowers make as a student loan lawyer is to ignore the situation — that’s not something you want to do here, as it can have serious consequences.
Step 1: Get background information.
When you’re served with a lawsuit, it’s natural to feel overwhelmed.
You, your friends and family, and your co-signer have likely been hounded with phone calls. You have no idea how much you owe on your student loans. You don’t even know how student loan lawsuits work.
The key is to gather the information you need and respond, not react, to the lawsuit.
Read through the summons and look for the following information:
What court you’re being sued in
Who is suing you
How much they’re suing you for
When you have to respond by
That last detail is crucial: the response deadline. The last thing you want to do is miss your court date and lose without having offered a student loan lawsuit defense.
If you do, a default judgment could be entered against you. This means you could be facing private student loan wage garnishment.
Step 2: Speak with a student loan lawyer.
Even if you’re thinking about representing yourself in court, you need to get legal advice from a lawyer that works with student loan borrowers.
The reason is these private student loan lenders and collection agencies do this every day. Chances are, you don’t know as much about the student loan lawsuit business as they do.
By working with a student loan lawyer, you can get advice from someone who knows this process inside and out. They can tailor a strategy that’s unique to your situation and guide you through each step.
Go to Google and search: “student loan lawyer” and “your location.” Then, start calling lawyers in your area to schedule an appointment. (Or, set up a chat with me.)
To make the most of your and the lawyer’s time, write down your questions ahead of time. This way, you can make sure all of your questions are answered.
If you decide to hire an attorney at that point, your work is done. They will handle everything moving forward. You’ll likely just need to show up on your court date with your attorney. If you’re still set on representing yourself, you have some more work to do.
Step 3: Answer the lawsuit and head to court.
Let’s break down this process of answering and appearing in court piece by piece. Here’s what you need to do:
First, look through the lawsuit documents and find the complaint.
You’ll need to go through the numbered paragraphs and answer the petition. For most of them, your answer will either be to admit, deny, or say you can’t answer for a particular reason.
You will also want to add any defenses you may have. Some common borrower defenses include:
The loan has been paid
The statute of limitations has lapsed (more on this later)
The company suing you doesn’t have the standing to sue you
The company suing you can’t admit their records
The company suing you isn’t licensed to do business in your state
The loan is current
Someone other than you borrowed the loan (such as identity theft, forgery, etc.)
The amount you’re being sued for is wrong
The loan was discharged in bankruptcy
Another defense is that it could sometimes invalidate the agreement if you were a minor when you signed the loan.
If you’re feeling confused trying to answer these paragraphs, you may be better off hiring a student loan lawyer to help you prepare your answers. They have experience working with these sorts of lawsuits and know what will help you plead your case well.
Step 4: Go to court.
After you prepare your answer, you’re ready to go to court on the scheduled date.
When you go, approach the bailiff and tell them your name. This will accomplish two things. First, you’ll make sure you’re in the correct courtroom. Second, and more importantly, it lets the court know you’re there and you’re ready to defend yourself.
From here, you may be approached by the attorney who filed the private student loan lawsuit. They might offer you a settlement or ask the case be continued. No matter what happens, make sure you get it in writing, signed by the judge.