Over the past decade we've seen a number of scandals floating around debt ownership and robosigning. That's the process where creditors swear they are the real owners of a particular debt but can't actually produce the proof when pushed to.
And sense most consumers fold up into a ball and mostly never fight back when they are sued over old debt, debt buyers win massive amounts of lawsuits for debt they can't legally prove they own.
Attorney Greg Reichenbach sent me an interesting article that reinforces this point. The article is specifically about National Collegiate Student Loan Trust but it applies to nearly any private student loan debt that has been sold on to a new debt buyer.
In the case of Adam Beverly, who was sued by National Collegiate Student Loan Trust over student loan debt, when he pushed them to show him the evidence they had the authority and documentation to prove they owned the debt, they could not. In Beverly's case "a panel of Ohio judges said the collector had no evidence that it owned the debt and vacated the judgment."
Not that long ago, another lawyer, Greg Fitzgerald, contributed a guest post titled "Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan." Fitzgerald noted that even if a student loan debt is now owned by someone other than the original creditor, that can be the open door to pay much less back even if the debt is not vacated. Fitzgerald said, "Your loan may be sold to a debt buyer. In fact, it may be sold several times. Your chances of success (defined as paying less than 100%) increases dramatically."
But consumers who were sued by National Collegiate over student loan debt and who have demanded to see the proof they own the debt have won in Ohio, Florida,and Kentucky. And cases in New Hampshire and Pennsylvania have proved to be trouble for National Collegiate Student Loan Trust, as well. In California there is a pending class-action lawsuit against National Collegiate over these same issues.
Greg Reichenbach, who contacted me, was quoted in the Bloomberg article. "The suits didn't assert that National Collegiate owned the loans, and after Beverly appealed, National Collegiate was unable to produce any documents indicating it owned them. "The whole basis for the lawsuit is that they are entitled to enforce this alleged debt, and they don't even claim that they were assigned the debt, let alone prove it," says Reichenbach, who handled Beverly's appeal."
But asking for proof the debt buyer has the authority to collect on a debt is not a luxury, it is your right. Here are some articles that discuss debt validation further and provide sample letters you can use. Click here, here, here, and here.
Before I go I wanted to leave you with three easy action items you can jump on right now to address your situation. Just click here.
If you have a credit or debt question you'd like to ask, just click here and ask away.
If you'd like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.