We often defend clients who are being sued by private student loan lenders. The cases are very similar and almost identical to credit card lawsuits. In this case, our client was sued by Arrowood Indemnity Company, a creditor that we see quite often in these type of lawsuits. Arrowood is a guarantor for many of these private student loans which means that they are the company that pays the servicer of the loan like (AES) if they are unable to obtain money from the lender. Arrowood has the same burden of proving standing as do any other lenders in court. They must show that they own the debt or properly acquired it especially if it is a securitized debt like many of the student loan lawsuits are.
Arrowood hired Meyers, Saxon & Cole as the law firm to collect this debt and to potentially obtain a judgment against our client. Meyers, Saxon & Cole is a debt collection law firm that we defend against on a regular basis so we knew that we would have to aggressively protect our client’s rights and prevent any kind of bank levy or wage garnishment. After pushing this case very nearly to trial, MSC conceded and we were able to negotiate an out of court settlement reducing the loan by about 70%.