What Illinois Consumers should Know about the Private Student Loan Situation in the News

Currently, there is a private student loan situation in the news. Here’s what Illinois consumers should know about it – and what not to believe.

Many Illinois consumers are aware of the fact that student loans are in the news – yet again. This time, a lot of people with unpaid student debt are tentatively excited. Apparently, missing paperwork may make about $5 billion in private student loan debt legally uncollectable. These tens of thousands of loans in question are held by National Collegiate Student Loan Trusts (NCSLT). The primary debt collection agency, Transworld Systems, has struggled to produce the proper paperwork to prove ownership of these loans. For this reason, in courtrooms throughout the country, judges have dismissed cases against debtors sued by TransWorld. However, consumers in Illinois with unpaid student loans held by NCSLT should put their victory dances on hold. Why? Just because a debt is uncollectable does not mean it is forgiven.

What Illinois Consumers with Student Loan Debt should know about National Collegiate Student Loan Trusts and Transworld Systems

Transworld operates like most debt collectors. At some point, they bring legal action against delinquent borrowers with loans owned by NCSLT. Once sued, Illinois student loan debtors have two options. They can get legal representation and show up in court on the established date. Or, they can ignore the summons and have a judgment entered against them. Unfortunately, consumers who get default judgments against them for unpaid debts normally face wage and/or bank account garnishments.

The game changed for Transworld when consumers starting fighting back by showing up for their court dates with lawyers. Soon, it was discovered that the paperwork on these delinquent student loans was highly inadequate. So, in several states so far, judges have ruled in favor of the defaulted student loan borrowers. This has prompted a growing number of consumers sued by Transworld to hire attorneys and fight their own case. As of yet, none of these cases have been settled in an Illinois court, but it will likely happen soon.

The Best Way for Illinois Consumers to Handle Past-Due Student Loan Debt

Illinois consumers who owe private student loan debt should take all of the hype surrounding this situation with a big grain of salt. Absolutely nothing indicates that $5 billion dollars in student debt will disappear forever and never be seen again. Remember that you are sued by a debt collector and your case is dismissed, the debt doesn’t go away.

Under the right circumstances, debtors who “win” one case against them can be sued again within a certain timeframe. In order for the debt to truly disappear, the statute of limitations must run out. Until that happens, even legally uncollectable debt can do a lot of damage to your credit score. So, with this in mind, Illinois residents who have a past-due loan held by NCSLT shouldn’t necessarily bank on this situation. If you are offered a reasonable settlement on a student debt that you actually owe, you may want to take it.

For recent graduates in Illinois facing student loan payments, there should be no temptation to default on purpose and hope for the best. Defaulting on any type of loan is likely to do serious harm to your credit score. While this may be of little importance to you now, later, when you want to finance a car or home, your low credit score will make it much more difficult to meet your goals.

So, do the right thing and keep up with your student loan payments. If you run into trouble, contact your loan provider and work out a payment plan that fits your budget. However, if you’re already in default and receive a notice that a debt collector is suing you, call a lawyer.

When Illinois Consumers need Legal Help with Student Loan Issues

At Credit Repair Lawyers of America, we care about your legal rights as a consumer and the accuracy of your credit reports. So you should give us a call if . . .

  • You’re sued by Transworld over a student loan held by National Collegiate Student Loan Trusts (NCSLT);
  • A debt collector harasses you about student loan debt that you don’t actually owe;
  • In attempting to collect a student loan debt, a debt collector threatens you, uses abusive language, or calls repeatedly and at all hours;
  • You’ve paid off your defaulted student loan or have been forgiven, and the debt is still listed on your credit reports as unpaid.

You don’t have to deal with these issues on your own. Instead, Illinois residents can now get FREE legal services from an experienced attorney by contacting Illinois Credit Repair Lawyers.

The Free and Legal Way to Get Better Credit

Don’t let errors or student loan debt reporting mistakes on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (404)591-6680 or sending him a message through our contact page.