I was defaulted on my loans, despite having ample balance in my dedicated loan payment account. I believe that happened for 2 reasons: 1) the Bank wanted immediate cash payment on the federal guarantee; and 2) it would increase the default rate to bolster their argument that they were taking on high risk debt and should accordingly receive higher compensation from the government.

On the last day of every month I transferred more than enough money into my student loan payment account. On the first of every month the full payment was taken out. For years. Then one day they stopped taking the money out. I made calls, I sent faxes, emails and visited the Bank several times to try to get them to take the money out. No one knew why withdrawals had stopped. I kept making my monthly payments.

I eventually got a call from the Bank telling me they had made a mistake and I owed another $30 a month and I told them to fuck off as that was not what the contract said. They sent me to collections but got no where simply because I kept asking for them to give me a copy of the signed contract that said I owed the amount that they claimed. So the Bank cashed in the federal loan guarantee and the government sued me.

Their documentary disclosure showed that the Bank gave the government an unsigned final loan agreement that inflated the numbers from my signed agreement, and that was the basis of their case.

After two years of depositions and motions, we get to trial. Near the end, the judge calls myself and the other lawyer into his office. To the other lawyer: why are you suing based upon a fraudulent document? You have no case and are wasting the Court's time. To me: You took and spent the money on your education. I am going to rule against you and if you appeal you will win but I do not care.

I agreed and said that I had my check book there but I was damned if I am going to pay the full amount after the shit the Bank put me through. The judge suggested that I pay the full loan amount and he would not make a costs award (in Canada it is a generally a loser pays system; if I lost I could have had to pay the government's legal bill). I agreed but the other lawyer wanted costs.

So the judge ruled against me with no costs award. If I had to guess I would say that they were about the same so the government maybe broke even. In the hallway I had a brief chat with the lawyer and his witness and just told them to send me the bill.

Never heard from them again and the judgement was never on my credit record.