Thousands of student debts could disappear due to missing paperwork

Thousands of student debts could disappear due to missing paperwork

Lawyers for National Collegiate, one of America's largest owners of private student loans, said in a legal filing there is the likelihood of more defaults.

Comprised of 15 trusts, National Collegiate holds almost 800,000 private student loans totaling $12 billion, $5 billion of which are in default, court documents show.

At least $5 billion in private troubled student loans may be dismissed because paperwork that proves loan ownership is missing. He is Donald Uderitz, the founder of Vantage Capital Group, a private equity firm in Delray Beach, Fla., that is the beneficial owner of National Collegiate's trusts.

The New York Times noted that hundreds of cases have been thrown out when borrowers challenge them because the trusts continually fail to bring the critical paperwork needed to proceed. And it is this trust which has reported the loss of this paperwork, which documents the chain of ownership for these loans.

This essentially wipes out the debt.

Some college graduates may not have to pay off their student loans thanks to a clerical error.

Two graduates display a farewell message on their mortarboards during Syracuse University's commencement ceremony

Even if National Collegiate owns your loan, however, that doesn't mean you're off the hook.

Others are left with debt for degrees they never completed, because the for-profit colleges they enrolled in closed amid allegations of fraud.

The trusts win numerous lawsuits they file automatically, because borrowers often do not show up to fight. At this time, the court ruled that billions of dollars in subprime mortgages were uncollectible due to missing or faked documentation.

Smith also encourages borrowers to file complaints with their state attorney general and the Consumer Financial Protection Bureau, and to push state legislators to prohibit private student loan holders from obtaining judgments when they lack proof that they own the loans that are the subject of the lawsuit. Once borrowers are sued, most either choose to settle or ignore the summons, which allows the trusts to obtain a default judgment.

Since the creditors do not have documents proving who owns the loans, judges have been dismissing the lawsuits. Transworld did not respond to a request for comment.

Best Tweets By Indian Cricketers Congratulating Mithali Raj For Her Record
Australia maintain their only concern is getting the win and whether they play their final in Bristol or Derby is of no concern. She scored nine centuries and 46 half-centuries during her career, her highest being an unbeaten 173 against Ireland.

Related Articles