Nashville lawyer who beat student loans by suing shell company posts how he did it online

NY POST ^ | July 1, 2023 | By Isabel Vincent and Matthew Sedacca

[dennisw]

A Nashville lawyer found a novel way to beat student loans: a lawsuit.

In subsequent tweets, Manookian shared the basic steps others could follow to get their student debt wiped through the legal system.

“This isn’t about loan forgiveness,” Manookian told The Post.

“It’s about holding these companies to the very same contract that they insist debtors comply with.”

Manookian, who attended Vanderbilt University Law School, told The Post he took out two loans from JP Morgan and Bank One for $60,000 to pay for his education, chipping away at his students loan debt for “upwards of a decade.”

A turning point came in 2016, when Manookian was looking to buy a building in Nashville for his law firm.

Brian Manookian tweeted about the way he conquered his own student debt back in 2016, by going to court after his original lender transferred his accounts to a shell company without telling him.

“Re-upping this for no particular reason,” Brian Manookian, 41, posted to Twitter, which included an image of the lawsuit he filed against the similarly named lenders, National Collegiate Student Loan Trust 2004-2 and National Collegiate Student Loan Trust 2006-2, in Tennessee State Court in 2016.

“The easiest lawsuit I ever filed and anyone can do it,” he wrote.

The original tweet has raked up 3.2 million views.

The legal eagle’s tweet thread came Friday, hours after the US Supreme Court struck down President Biden’s plan to cancel more than $400 billion dollars in American student loan debt, ruling the effort was unconstitutional.

Biden’s plan, announced in August, would have canceled up to $10,000 in federal student debt for Americans earning under $125,000 or households making under $250,000, and eliminated up to $20,000 for Pell recipients.

[ifinnegan]

“ This isn’t about loan forgiveness,” Manookian told The Post.

“It’s about holding these companies to the very same contract that they insist debtors comply with.”

Nothing to do with Biden’s idiocy and graft.

Seems a contract issue. Lender breached agreement.

[Chad C. Mulligan]

Wannabet he paid cash for his $70,000 Bimmer? So why hadn’t he paid the loans off long before?

[Attention Surplus Disorder]

Selling a loan to another lender is nothing at all unusual. It happens every day. 95% of all home loans are sold to Fannie Mae or Freddie Mac. That does not forgive Nor invalidate the underlying loan In any respect. The borrower just sends the check to a different address.

[Pikachu_Dad]

So he is a deadbeat. Got it.

[pierrem15]

So why hadn’t he paid the loans off long before?

Probably for the same reason we paid off our student loans very slowly: we refinanced at ridiculously low rates. After inflation, they were paying us to remain in debt.

[pierrem15]

That would depend on the terms of the loan. The terms for the lenders regarding student loans are very exacting, especially regarding transferring the loans and informing the borrowers.

[Alberta's Child]

Interesting details about that point in the article:

He subsequently took the companies to court in his home state to find out if they were in fact holding his loan. They failed to respond and he got an automatic win from the court known as a default judgment.

"In my experience, none of these student loan servicers / loan sharks kept proper chain of title," Manookian tweeted. "You challenge their ownership, they decline to respond, you get a default judgment."

Seems simple enough. The original lender sold the loans to some obscure entity, and some time later they didn't even know they were holding them.

[pierrem15]

He won by the simplest means possible: he filed suit demanding the servicer prove chain of custody (ownership) of the loan. They failed to respond, he won a default judgment.

[qaz123]

Was this posted to somehow tie what this guys did compared to Biden’s money grab and the recent scooter decision?

Apples and onions.

[KevinB]

Seems a contract issue. Lender breached agreement.

He didn't prevail because the holder of the loan breached the loan agreement. He prevailed because the holder failed to timely respond to his lawsuit, thus resulting in a default judgment against it. The chance of this happening on a significant scale is nil.

[qaz123]

Court decision.

[DouglasKC]

Nice but haven’t all student loans in the past decade been us government loans. Good luck suing the government.

[chaosagent]

Selling a loan to another lender is nothing at all unusual. It happens every day. 95% of all home loans are sold to Fannie Mae or Freddie Mac. That does not forgive Nor invalidate the underlying loan In any respect. The borrower just sends the check to a different address.

Send the check to which address?

We paid my wife's student loans off in 1969, a year or so after we got married. Then in 2005, 36 years later, 3, count'em, 3 companies came back demanding payment. According to them, during that 36 years, the original $2000 or so, had grown to either $52,000, $58,000, or $75,000, depending on which company was asking.

During that time, working for the DOD and NASA, we had moved more than 20 times, records had been lost or thrown out, banks had gone out of business, etc.

Finally got my Senator's office involved (a friend of a friend of a relative) and they finally got it straightened out. But it took over a year.

[rlmorel]

Don't forget who their "Jesus" is on the Left: it is Saul Alinsky, and their Bible is "Rules for Radicals".

This is the same guy who bragged with pride, as a 43 year old adult, how he ripped off cafeterias as a young student, and showed others how to do it. Not a thought for someone who owned them, trying to make a living.

That is like being an adult and bragging with enthusiasm and pride about shoplifting as a kid. I shoplifted as a kid, and I am embarrassed, shamed, and not in the least proud of it in any way.

Not him.

So in that light, I view anyone who took out these loans for tens of thousands of dollars and is fully onboard with welching on their payments and looking for ways to default on their loans in exactly the same way, and with the same amount of contempt that I view Saul Alinsky.

Scum of the earth. Anyone who does this. Anyone who supports this. And anyone who makes excuses for it.

[rlmorel]

I was glad to hear you got that straightened out. But that is government stupidity, not keeping track in some way due to standard governmental incompetence.

In my opinion, it is quite a different thing to take out a loan, sign on a dotted line, get the money, live at school, get the education, then refuse for whatever reason to pay it back.

I have a dim view of those people, and it isn’t because I haven’t walked in their shoes.

It is because I made the decision of where I went to school, what major to pursue, and what kind of expenses I was going to incur as I went to school. I joined the Navy and used the GI Bill. I went to a small state college rather than Harvard or MIT. I lived at home and commuted, driving second or third hand cars with bald tires. And I worked all the way through college, working as a dishwasher in a nursing home, UPS stevedore (only for two weeks) and eventually landed an awesome part time job as a lab assistant in the Pharmacology Department at the medical school where I was studying.

I made all those choices so I didn’t breach the faith of my country or the bank on the loan, put my parents who couldn’t afford me to go to college on the spot, or myself by hogtying my future because I didn’t have enough common sense to know I had to live within my means.

And my wife sees eye-to-eye with me on this and all things financial (or I agree with her) and we got a modest ranch rather than something we couldn’t afford to pay for or even put furniture in. We have never purchased fancy cars, and we worked to become debt free early in our lives.

None of that was by happenstance or by the death of relatives who left us money. We never got any of that. We thought it through and made choices.

A lot of these people who whine about these loans had the opportunity to make the same choices I did, but instead, they chose both stupid and selfish paths. Not always. There are always valid and unforeseen circumstances were loans cannot be paid back. My derision does NOT apply to those unfortunates.

[Attention Surplus Disorder]

This worked some number of times (I cannot state the general nor overall frequency) during the financial crisis 2006-2009. The bundling/unbundling of loans into and out of tranches thrashed the recordkeeping trail. And furthermore, the documents proving the ownership of the mortgages in many states had to have so-called wet signatures on them, so there were lenders who legitimately owned loans but did not have the required original copies of the docs.

[Attention Surplus Disorder]

Sure seems like a worthwhile gambit; you could blow $2500 in a failed suit to assemble the originating docs and if the lender can’t come up with them, you could gain well into 5 figures.

[Ex-Con777]

>So why hadn’t he paid the loans off long before?<

He tried and that’s what caused the issue to arise. He requested a payout amount and the loan holder wouldn’t respond. How else would he be able to pay it off?

EC

[wildbill]

It is almost impossible to find a lawyer who will take a case on Student Loan negation. This is because the S.Ct affirmed rulings in many Fed. Circuit Courts that upheld laws passed by Congress to deter all lawsuits for relief of loan obligations.

This was because many of the student debtors were negating loans via the route of bankruptcy. This loophole was closed by an new bankruptcy act that took effect in Oct. 2007 I think.
At any rate, finding a lawyer who will represent a student in an action to renege on the loans is virtually impossible, so a student would have to file the suit Pro Se in most cases.