LSNYC Wins Major Victory for Thousands of Student Loan Borrowers Facing Zombie Debt Collection 

Legal Services NYC secured a major court win for our client, Tameeka Colon, and for millions of other student loan borrowers facing zombie debt collection.  

Due to high interest rates and fees, Ms. Colon could no longer afford her student loan payments. Six years later, in 2019, a debt buyer, Student Loan Solutions, sued her to collect the outstanding amount. In fact, Student Loan Solutions purchased more than $200 million in defaulted private student loans from Bank of America. 

The company argued that the original creditor, Bank of America, never formally demanded full repayment, a claim that would have prevented the statute of limitations from expiring. However, Ms. Colon provided a 2013 collection letter from Bank of America clearly requesting payment of the full balance, demonstrating that the debt had been “accelerated,” which started the statute of limitations clock. 

Thanks to Legal Services NYC intervention, an appellate court found that the collection letter was “clear and unambiguous” in its demand for full payment, confirming another court’s ruling that Student Loan Solutions had filed the lawsuit too late. 

The decision not only brings closure to Ms. Colon’s case but could also benefit thousands of other borrowers with similar loans. Many of these loans, often issued with double-digit interest rates, have left borrowers struggling to make payments or defend against aggressive collection practices. 

Further, LSNYC’s case is helpful to a class action case filed by the New York Legal Assistance Group which seeks to hold the debt buyer accountable for attempting to collect on loans that may no longer be enforceable due to statutes of limitations.