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As Paperwork Goes Missing, Private Student Loan Debts May Be Wiped Away

10 points by tysone 9y ago

wahern 9y ago
At the bottom of the Great Recession I remember reading about somewhat similar situations wrt to mortgages and, especially, unsecured debt purchasers. Basically, lawyers can often come to court without concrete evidence of the debt (both it's origin and the chain of transfer), either because it was lost or because they didn't have the time to locate and assemble it. If the case is uncontested (i.e. you don't show up), then it doesn't matter because there's nobody to challenge the prima facie case.[1] But theoretically the defendant could have just shown up and contested the validity of the debt: "Your honor, I don't remember that debt" or "your honor, I'm pretty sure bank XYZ possesses the mortgage". Because the plaintiff has both the burden of proof and of persuasion, it's trivial to put the ball back in his court on the first volley. The plaintiff's lawyer would request time to respond to the challenge. If they had a huge backlog (as during the Great Recession) you'd win if they couldn't gather the evidence in time, assuming they even had it. For smallish unsecured debt the lawyer is likely to simply walk away and default.[1] If you got a final judgment, then any debt would be extinguished as a legal matter, presuming the plaintiff was the actual and rightful owner of the debt. That is, even if they sold the debt again it would no longer be enforceable, even if the chain of evidence was subsequently discovered or made available. [1] I once won a case in traffic court when the prosecutor stormed out of the courtroom after losing 3 seemingly easy cases and motions. I don't know if she forgot about my case, if the cop failed to show up (for a second time), if she was just pissed at the judge, or some combination, but she never came back. My case was called and the judge asked the bailiff to step outside and see if the prosecutor was in the hallway. (He may have also called her office.) The bailiff quickly came back shrugging his shoulders, so the judge dismissed my case. I was happy but a little disappointed. I invested a ton of time photographing the scene of the alleged traffic violation, and even hired a lawyer, in an attempt to prove that the cop couldn't have seen what he alleged he saw--a failure to come to a complete stop before turning right. I had a perfect driving record up until then and was hell bent on fighting that ticket. Plus, while I've rolled through many stops in California, that intersection was helluva dangerous and I _always_ came to a complete stop before turning. In fact, at that hour (about 1 AM), I often simply waited for a green light, and then some, before gingerly completing the turn as I'd seen many idiots/kids blow right through that intersection. (There were railroad tracks on the west side of the intersection which people loved to jump, often ignoring the red light.)

10 points by tysone 9y ago

At the bottom of the Great Recession I remember reading about somewhat similar situations wrt to mortgages and, especially, unsecured debt purchasers. Basically, lawyers can often come to court without concrete evidence of the debt (both it's origin and the chain of transfer), either because it was lost or because they didn't have the time to locate and assemble it. If the case is uncontested (i.e. you don't show up), then it doesn't matter because there's nobody to challenge the prima facie case.[1] But theoretically the defendant could have just shown up and contested the validity of the debt: "Your honor, I don't remember that debt" or "your honor, I'm pretty sure bank XYZ possesses the mortgage". Because the plaintiff has both the burden of proof and of persuasion, it's trivial to put the ball back in his court on the first volley. The plaintiff's lawyer would request time to respond to the challenge. If they had a huge backlog (as during the Great Recession) you'd win if they couldn't gather the evidence in time, assuming they even had it. For smallish unsecured debt the lawyer is likely to simply walk away and default.[1] If you got a final judgment, then any debt would be extinguished as a legal matter, presuming the plaintiff was the actual and rightful owner of the debt. That is, even if they sold the debt again it would no longer be enforceable, even if the chain of evidence was subsequently discovered or made available. [1] I once won a case in traffic court when the prosecutor stormed out of the courtroom after losing 3 seemingly easy cases and motions. I don't know if she forgot about my case, if the cop failed to show up (for a second time), if she was just pissed at the judge, or some combination, but she never came back. My case was called and the judge asked the bailiff to step outside and see if the prosecutor was in the hallway. (He may have also called her office.) The bailiff quickly came back shrugging his shoulders, so the judge dismissed my case. I was happy but a little disappointed. I invested a ton of time photographing the scene of the alleged traffic violation, and even hired a lawyer, in an attempt to prove that the cop couldn't have seen what he alleged he saw--a failure to come to a complete stop before turning right. I had a perfect driving record up until then and was hell bent on fighting that ticket. Plus, while I've rolled through many stops in California, that intersection was helluva dangerous and I _always_ came to a complete stop before turning. In fact, at that hour (about 1 AM), I often simply waited for a green light, and then some, before gingerly completing the turn as I'd seen many idiots/kids blow right through that intersection. (There were railroad tracks on the west side of the intersection which people loved to jump, often ignoring the red light.)