JEFFERSON CAPITAL SYSTEMS, LLC VS. MICHAEL S. SHEPARD ET AL, CGC-16-554420, No. 05563801 (California State, San Francisco County, Superior Court Sep. 22, 2016) (2024)

`

`Angie Hong Hoar CA Bar #212152
`PO. Box 17210
`Ic’ifilzdg/ljlggg-ggiigg
`Fax. 303-215-1351
`Attorney for
`JEFFERSON CAPITAL SYSTEMS, LLC
`
`if
`
`V3;
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`Sgeéfjgg Cw c; CoornJaJ ”
`SEP 22 2016
`CLERK OF (TH? COURT
`( 11 w, WW4
`
`
`Deputy Clerk
`
`an
`
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`
`FOR THE COUNTY OF SAN FRANCISCO
`
`JEFFERSON CAPITAL SYSTEMS, LLC,
`
`) Case N0.:
`)
`
`_
`_
`C80 1 6 55 11
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`h 2 0
`
`Plaintiff,
`
`) UNLIMITED CIVIL
`
`XVdA8
`
`) )
`
`% COMPLAINT FOR MONEY AND
`) DAMAGES
`s.
`1
`
`VS‘
`
`MICHAEL S SHEPARD AND ELIAS M
`
`)
`
`ORTIZ,
`
`; PRAYER AMOUNT [329349.77
`
`Defendarit[s].
`
`
`)
`)
`
`Plaintiff alleges:
`
`FACTS COMMON TO ALL CAUSES OF ACTION
`
`1.
`
`Plaintiff, Jefferson Capital Systems, LLC, is and at all times herein mentioned is a
`
`limited liability corporation authorized to do business in the State of California.
`
`2.
`
`Defendant[s], MICHAEL S SHEPARD AND ELIAS M ORTIZ, individual[s],
`
`reside[s] in SAN FRANCISCO County, California.
`
`3.
`
`Plaintiff is in the business of purchasing delinquent accounts receivable, including
`
`the transfer and assignment of all legal rights thereunder. Plaintiff has purchased from SLM
`
`EDUCATION CREDIT FINANCE CORPORATION Defendant[s]’ account referenced in this
`
`.-
`
`- 1 -
`Complaint
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`\DOO\]O\
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`1
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`action. Plaintiff is the current owner of this receivable and all rights to pursue collection from
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`2 Defendant[s] for this purpose.
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`9)
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`4
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`5
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`4.
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`This suit concerns an account that was purchased by Plaintiff after January 1, 2014
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`and, therefore, is subject to California Civil Code §1788.50, et seq.
`
`5.
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`Plaintiff is a debt buyer.
`
`6.
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`Defendant[s] applied for and was granted a loan from SLM EDUCATION CREDIT
`
`FINANCE CORPORATION. Defendant[s] received the loan funds through disbursem*nt either
`
`directly to Defendant[s] or through the Defendant[s]’ school. Defendant[s] agreed to make
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`\OOO\)0\ payments per the Loan Agreement. Statements were sent to Defendant[s]. Defendant[s] defaulted
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`10
`11
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`in making the required payments.
`‘
`7.
`Plaintiff is the assignee ofthe Account. SLM EDUCATION CREDIT FINANCE
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`12 CORPORATION assigned, transferred all right, title and interest in the credit account. Plaintiff is
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`13
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`the sole owner of this debt.
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`14
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`8.
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`The balance at charge off was $29349.77. Plaintiff is not seeking post charge-off
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`15
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`interest or fees.
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`16
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`17
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`9.
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`The date of the default on the account was on or about 03/31/2014.
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`10.
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`The name of the charge-off creditor is SLM EDUCATION CREDIT FINANCE
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`18 CORPORATION and the account number of the charge-off creditor ended in XXXXXXXXX0105. The
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`19
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`address SLM EDUCATION CREDIT FINANCE CORPORATION maintained at the time of
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`20
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`charge-off was PO Box 6180, Indianapolis, IN 462026-6180.
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`21
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`11.
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`The last known name and address that the charge—off creditor had for Defendant
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`22 prior to sale of the Account was MICHAEL S SHEPARD 1501 CAYUGA AVE SAN
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`23 FRANCISCO CA 94112.
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`24
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`12.
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`The subject debt has been purchased by the following entities after charge-off:
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`25
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`Jefferson Capital Systems, LLC PO Box 17210, Golden CO 80402.
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`26
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`27
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`13.
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`14.
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`Plaintiff has complied with Civil Code §1788.52.
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`Attached hereto is a true and correct copy of a document required by California Civil
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`28 Code §1788.58(b).
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`_ 2 _
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`Complaint
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`

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`FIRST CAUSE OF ACTION
`
`(Brieach of Written Contract on Account)
`
`Plaintiff refers to and incorporates paragraphs 1 through 14.
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`Defendant[s] applied for and was granted a student loan; specifically Student Loan
`
`15.
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`16.
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`Account Number XXXXXXXXXOlOS (“Account”).
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`17.
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`At the time the Account was originally opened, Defendant[s] signed a Written
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`Application for the Account.
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`18.
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`The Written Application also contained the Loan Agreement (“Agreement”) which
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`contains all of the terms and conditions governing the relationship between Plaintiff and
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`Defendant[s] regarding the Account, including, but not limited to, repayment and default under the
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`Agreement.
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`19.
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`Defendant[s] received the Student Loan Funds through disbursem*nt either directly
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`to Defendant[s] or through the Defendant[s]” school.
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`20.
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`Statements were sent to Defendant[s] which itemized all payments made and the
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`Balance owing on the Account.
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`21.
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`Defendant[s] ceased making the minimum monthly payments due on the Account.
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`As a result of the failure of the Defendant[s] to make the minimum monthly payments on the
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`Account as they became due, the Defendant[s] breached the written Agreement, therefore the
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`balance owing on the Account is now due and payable in full.
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`22.
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`As of 03/31/2014, there was a balance due on the Account in the amount of
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`$29349.77, plus interest thereon in accordance with proof.
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`23.
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`As the direct and proximate result thereof, Plaintiff has been damaged in the amount
`
`of $29349.77.
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`24.
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`By the terms of the Agreement, Defendant[s] agreed to pay costs incurred by
`
`Plaintiff in collecting any amount due pursuant to the Agreement.
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`SECOND CAUSE OF ACTION
`
`(Account Stated on Account)
`
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`_ 3 _
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`Complaint
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`1
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`2
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`3
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`25.
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`Plaintiff refers to and incorporates paragraphs 1 through 24.
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`26. Within the last four years, an account was stated in writing by and between Plaintiff
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`and Defendant[s] and it was agreed that a balance of 829349.77 was due to Plaintiff from the
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`4 Defendant[s] as of 03/31/2014.
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`5
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`27.
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`Plaintiff has made demand on the Defendant[s] to pay said sum, but the Defendant[s]
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`6 has refused and continues to refuse to do so, and the sum of $29349.77 is due and payable to
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`7 Plaintiff from the Defendant[s].
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`9
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`THIRD CAUSE OF ACTION
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`(Open Book on Account)
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`28.
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`Plaintiff refers to and incorporates paragraphs 1 through 27.
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`29. Within the past four years, the Defendant[s] became indebted to Plaintiff on an open
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`12 book account for money due in the sum of 829349.77.
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`13
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`30.
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`Although Plaintiff has made demands on the Defendant[s] to pay said sum, the
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`14 Defendant[s] has refused to pay and continue to refuse to do so, and the sum of $29349.77, is due
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`15
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`and payable to Plaintiff from the Defendant[s].
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`WHEREFORE, Plaintiff prays for Judgment against Defendant[s] as follows:
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`On the First, Second, and Third Cause of Action:
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`1. For the damages and money in the sum of $29349.77,
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`2. For the costs of suit; and
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`3. For such other and further relief as the court may deem proper.
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`22 DATED: 06/21/2016
`
`::
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`25
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`28
`
`aw
`
`Angie Hong Hoar
`Attorney for Plaintiff
`Jefferson Capital Systems, LLC
`
`_ 4 _
`
`Complaint
`
`

`

`2007-2008
`
`
`Car-mom Mme] notbo usedon the application. Tuition Answer" Loan Application
`
`
`SHEPARD
`Ml HAEL
`S
`_
`r
`0232
`
`Lat nuns
`Fir-t wane
`Ml
`Suffix Ur, III)
`Seer
`ea my number
`1586 THOMAS AVE Street
`10
`Rmnenent street eddeeo (If your permanent street address is 9 R0. Bax, you must complete the physrcal street address secfmn below.)
`Years at addreee
`
`SAN FRANCISCO
`CA
`94125
`”5
`Student
`City
`State
`Zp Code
`Country Code
`Relntienehip to slident
`____—________________—_._________._-..—.-._~—-—__
`Phyeical etreel addreee (if different from permanent address)
`Apt
`
`Apt
`
`(My
`587-3603
`415
`1
`Country Prefix Area Code Telephone Number
`Form-non! telephone number
`GRAYGH |A@G MAI L.COM
`E-rnail adden-
`
`STUDENT
`Neme of em player
`
`Unemgloyed
`Occupation
`
`
`6
`0
`Yum Month
`It paemt
`employer
`
`State
`
`Extension
`
`Country Code
`Zip Code
`§§Z'mfi
`515
`1
`Country Prefix Arte Code Tolephme Number
`Mobile/cellular telephone number
`
`Extension
`
`____
`
`605-0150
`408
`1
`Country Prefix Area Code Telephme Number
`Work telephone number
`
`Exleneion
`
`S 10,000.00
`Grove annual salty or retirement income
`(Documentation required, see page 2.)
`
`How often paid?
`
`a moldy
`
`El biawe-kly
`
`u twice mm»
`
`11min, Alana-u child amped, orupmrc 3%.— N0"
`maintenance income need notbe revealed
`Additional income
`Source at
`ilyuu do not will: to have it considered
`eddtiond income
`as a basin hr repaying thin loin.
`
`Heavily payment amount
`SjflflfiD—m Sg—
`Rent
`or Mortgage
`
`Name at mortgage holder
`
`
`
`
`
`[YES, I am I U.Sr oitlzen
`[I NC, I am not 3 US citinn but I am an ellgkile pernment resident C NO.| em NOT 3 us. cmren or permanent resident
`(See page 1, Who is eligible
`4‘01 Kuhn Answer?)
`
`
`SHEPARD
`MlgtjAEL
`S
`11232___
`Last name
`First run»
`MI
`Suffix (in. III)
`Social Security number
`1586 THOMAS AVE Street
`_ _____
`Permanent etreul address (If your permanent mar address is a PO. Box, you must com/91ers the physical street address section belcm
`Apt
`
`SAN EBANQISCO
`CA
`95125
`US
`1985
`City
`State
`Zp Code
`Country Code
`Data of birth
`
`Physical street eddies. (If different from permanent address)
`
`Gauntry Code
`Qty
`State
`Zip Code
`
`605-01 50
`408
`1
`415
`587-3803
`1
`Country Prefix Area Code Telephone Number
`Extension
`Country Prefix Area Code Telephme Number
`Permanent telephone number
`Mobile/cellular telephone number
`
`GRAYGHIA@G MAILQQM
`E-meil eddeee
`
`Extension
`
`Apr
`
`
`
` MART UNIVERSITY SAN FRANCISCO
`CA
`College name
`co*kge city
`Stain
`
`For the academic period from 08 m to 12 2007
`Month Year
`Month Year
`
`Anticipated graduation data 06 2010
`Month Yaer
`
`Enchant:
`
`fl Full time D Half time
`
`C] Lee. than halftime
`
`Grade Level
`Undergrlduete
`
`El Freshman I Sophom*ore
`
`Cl Junior
`
`E1 SOnIGI
`
`D 5th Year and beyond Gredulte
`
`[1 1n Year D 2nd Year Cl 3rd You
`
`[I] Beyond 3rd Year
`
`APPLICATION PAGE ONE
`
`Continue to pen. two 9-)"
`
`Mail to: Sallie Mae, Private Loan Processing, R0. Box 859243, Braintree, MA 02185
`
`
`
`
`
`
`
`TuitionAnswerLoanApplicationandPromissoryNote2007-2008
`
`
`
`
`
`
`
`True & Exact Copy
`
`

`

`
`Reference I:
`
`NELSON
`VERONICA
`Lee! nm
`First name
`1501 CAYUGA
`Permenent street address (PO. anee not accepted)
`
`L“
`Sufl’u (1n, Ill)
`Ml
`85743.3
`415
`1
`Country Prefix Aree. Code Telephme Number
`PernInent telephone uurnlm
`
`Extension
`
`5
`"
`
`Apt
`
`
`SAN FRANCISCO
`City
`
`CA
`State
`
`94112
`Zip Code
`
`US
`Country Code
`
`Parent
`Relatinnehrp to borrower
`
`Reference 2:
`
`_E__
`SHEPARD
`LOWELL
`Last nan!
`First name
`Ml
`Sufl‘u UL. Ill)
`
`
`1591CAYUGA
`_.
`1
`415_ _a§7-3eoa
`Permanent street address (90. Boxes not accepted)
`a I
`-
`Apt
`Country Prefix Area Code Telephone Number
`Extension
`Permanent telephone number
`
`
`SAN FRANCISCO
`CA
`941 12
`US
`Parent
`City
`Slate
`Zip Code
`Country Code
`Relationship to borrower
`
`
`ORT‘Z
`ELIAS
`M— Sr
`Lam nm
`First name
`MI
`Suffer UL. lll)
`Social Security number
`
`14065 BUCKNER DR
`15
`WW Apt m
`
`
`till?
`SAN JOSE
`CA
`95127
`us
`1952
`Friend
`City
`State
`Zip Code
`Country Code
`Date of birth
`Reletioneh'p to student
`____‘_______.__._______.__——————~——-__
`F'hyn‘od street address (If dilierent from permanent eddrm)
`Apt
`
`
`City
`968-6424
`209
`1
`Country Prefix Area Code Telephone Number
`Permanent telephone number
`EMORTIZ1050@NETZERO,NET
`E-rnu'l address
`WOLLBORGMlCHAELSON
`Name at employer
`
`State
`
`Extension
`
`Country Code
`Zip Code
`9686424
`209
`1
`Country Prefix Area Code Telephone Number
`Eaten-ion
`Mobile/cellqu telephone nUmber
`
`.
`’
`
`Employed
`Occupation
`
`6
`O
`Yer" Monthe
`at preeent
`employer
`
`938-6405
`925
`1
`Country Prefix Area Code Telephone Number
`Work telephone number
`
`Extension
`
`
`$ 40,000.00
`Gross annual salary or retiomont incorr-
`(Documenhtian required, see page 1U
`
`How often put?
`
`ll weekly
`
`El bl'wvekly
`
`El twice monthly
`
`El monthly Alimony. child support. or separate $L_ None
`Mina-ram income need not be mveded
`Additional income
`Source of
`ifyou do not wish to have R considered
`additional income
`a: a his for repaying this loan.
`
`Monthly paymort amount
`
`s% 3——
`Rent
`or Mortgage
`
`
`Nerve of mortgage holder
`
`
`
`
`
`for u'uun Arum/l)
`“YES. I am aU.S. citizen 3 NO. I am not a U.S. citizen but I am an eligible permanent unident
`(Surpage t, Whoiw ofiyibta
`
`[:1 NO, I am NOT a US citizen or purmmunt resident
`
`APPUCATION PAGE TWO
`
`Continue to page three to complete nppliunion and sign 4-»)
`
`
`
`
`
`
`
`TuitionAnswerLoanApplicationandPromissoryNote2007-2008
`
`
`
`
`
`
`
`True 8. Exact Copy
`
`

`

`12/37/2887
`
`1?: 38
`
`4152922584
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`FEDX KINKUS
`
`PAGE
`
`81
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`-—».——
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`I," -
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`.
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`....
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`.
`
`.-.-..»....-..-_.,-.,1
`
`‘,.._,. w'.’
`
`
`iii mnmuoorod
`Lou
`mm.— Amount my in MM! $7.500 Up to 840.000. (drip-Mina on ”I! MB" of school. and may no! exceed rho oefimeled coal 0! attendance).
`The Wet will add lhe supplemental fee lo your momma Iael'l amount. if «you Maul. lilo loan amount. lire humour and qualms? mud Irlllel IN: Held.
`Anuulpmo um of Tuillon Answer Loon funds: [duller alloolllun) em Tilllen, PM Room. Board som_._ Other Expuneee
`{plid direclly lo nailed)
`leduul'rorlel (1me not paid
`directly to line lnelllulloni
`
`Dll annr principll and Internet while In school
`D Play only irrlerool while in school
`D Fey admin-l and inland while in when]
`Repayment options check one
`”you donumhn Wm” ”WMW IIMI: in school. Dolmen! olpaynonre Willa-M in higherfeu. Leon repayment option may not be chungndnlter diebmomenr.
`
`
`
`.‘Signa’luriéé‘ ' 'Ail'5onum‘ " null-la. 11.61361.
`
`”
`
`'
`
`'
`
`'
`
`‘
`
`.
`
`,
`
`l
`
`l
`
`
`
`'mljo in my
`I underelend that I am not
`elgneluro on this Appfiontiommry Nero in
`lb- Lmder. if I choose Io lax rnyelmmo on line
`ApplonllonIPmmleaory Nora lo tho Lender. I
`irmnd: (i) my ill Iignulura to be binding on ma
`and to be m doctroril: lli
`slurp undu- nfii‘ronfle
`federal Ind elm law. (ii)
`for!
`'nloln revered
`hylha Lander to be on origin-l
`lull to
`conduct busheee with the Lender by ei
`'
`records and declronle Mum. and
`Ihellhle
`AppfiqefionIPron-lieeory
`w] not be governed
`on o.
`by«{Marie 3 or Mide 9 ol lire Unilorrn Commercial
`
`Notio- lo GUSTOMI
`in) Do not sign thin before ou road the
`Promnory Note oven ' orhomiao advised.
`(in) Do no! sign this if it mnilihe any blank
`spoons.
`to) You are untitled to an own copy of any
`van-Ion: you sign.
`(d) on have the light at my time lo pay in
`advonor; lire unmid beienoe duo moor his
`agreement wrlhmt p*rn
`and you may be
`unfilled to e partial relurl oi the finance
`charge.
`
`I declare that lho information provided about is
`true and complain to in: boat of my knowledge
`and belief. I have read md agree to the tonne
`of the Pmrnimmry Nola accompanying this
`uppiioo‘lion.
`
`I. THE COSIGNER HAVE READ THE
`APPLICABLE COSIINER normals).
`
`Promise to pl, Jointly and worellywiln rho other signals helm». | promioelopaytho londororany olhorlnldor alibi: loan ol some dhbursed underline
`a
`- men
`us.
`Wee‘gufln ' -- m'noory‘hem plus Internet and all olher charges (ha may become due; The terms and conditions eel forlh in the Promimry Hole commute
`THOROUGHLY READ THECONTRACT BEFORE YDUSIGN I'l'.
`
`
`
`_Wmfl
`A/ht/Mac’f We ”(3/
`[ae-
`‘
`‘
`..
`a
`A
`one-'- 2’07
`,lo
`enae prim lul name
`
`Lender use only
`
`
`W 007831
`1513238
`euros cede
`School node
`Fromm code
`
`c/o Sallie MOO. 50 Breinlroe Hil Pork. Suite 300. Hrninlree, MA 02184
`, UT
`Sallie Mae Bank, Mu
`
`Origlnlling lender
`
`ensign-r: Please read your stole-spocll'lo notlee. linen. ii applicable. sign, dale and return It to:
`Sallie Mae. human Answer Loan Processing. P.O. Box 859243. Bnlnlreo. MA 02185.
`Retain - copy for your records.
`..
`
`ansln Borrower and Guiana: If you are married, your spouse must read lho notice he married
`Msunsln resident and sign. data and return it to:
`Sallie Moe. mum Answer Loan Processing. 9.0. Box 359243, Brelntrae. MA 02195.
`Retain a copy for your records.
`
`Appuw'lon PAGE TH REE
`
`moor am Moo
`V! 067
`
`
`
`
`
`
`
`TuitionAnsWerLoanApplicationandPromissoryNote2007-2908
`
`
`
`
`
`
`
`True & Exact Copy
`
`

`

`12/87/2887
`
`17: 38
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`4152922564
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`FEDX KINKCIS
`
`PAGE
`
`62
`
`Name or lander:W
`
`Loan oonfirmaflonrhb
`
`NOTICE TO CALIFORNIA COSIGN ER
`madueclon an Ingles Se Requiere Por La Lev)
`_fi_—_———_——-———_~_~W—————-—
`
`You are being asked to guarantee this debt. Think carefully before you do. if the borrower doesn‘t pay the debt. you will
`have to. Be euro you can afford to pay if you have to. and that you want to accept this responsibility.
`
`You may have to pay up to the full amount of the debt ii the borrower does not pay. You may also have to pay late fees or
`collection costs. which increase this amount.
`
`The creditor can collect this debt from you without first trying to collect from the borrower. The creditor can use the same
`collection methods against you that can he need aga'mat the borrower. such as suing you, gamiahing your wages. etc. if
`this debt is ever in default. that fact may become a part at your credit record.
`
`This notice is not the contract that makes you liabie for the debt.
`
`I have received ajcopy of this notice.
`
`Slg'tamre of Designer
`.,
`«2:;
`Printed name of Goaigner
`
`i A
`
`AVISO PARA EL FIADOR DE CALIFORNIA
`(Spanish mnsiatlon Required by Law)
`
`ecfibir Northre de F'ador
`
`So to em pidiondo, que gauntlet: est: deuda. Pidnsolo con cuidado antes de ponaree do acuerdo. Si la persona que
`ha padldo eate prestamo no page la deuda. uated tendra que pagoda. Este seguro de que uated podra pagar 3i sea
`obligado a pagarla y do que usted doeea aceptar la responsabllldad.
`
`Si la persona que ha podido el prestamo no page Ia deuda. as poaible qua uated tenga que p‘agar la suma total de la
`deuda. mas los corpus por tardarse en el pogo 0 el costo do cobranza. Io oual aumenta el total de esta sumo.
`
`EI aoreedor (flnanelero) puede oobrarle a usted sin. prlrneramente. tratar do cobrarle at deudor. Los mien-toe metodas de
`cobrama qua puoden usarse contra el deudor. podran usarse contra Listed. tales oomo presenter una domanda on corte.
`quitar pane do su sueldo, etc. Si algurn voz no so cumpta con la obligacion de pagar osta deuda, ae puede incluir eea
`informaoidn en la historia de credito do usred.
`
`Esta avlso no es el oontrato mismo en que se le eoha a ustod la reeponsabilidad de la deuda.
`
`Reoibi una copla do we avian.
`
`Firma do fiador
`
`-=’
`
`Fed-ta
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`W E
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`True & Exact Copy
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`TuitionAnswerLoanApplicationandPromissoryNote2006-2007
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`
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`
`
`— P
`
`romissory Note
`
`In this Promissory Note (“Note") the words “I". “me". “my".
`'mine“ and “we" mean the borrower. student borrower and
`cosigner(s), unless the language specifically refers to only one
`or the other. “You". "your'l and “yours” means the lender as
`listed on page three of the application and any subsequent
`holder of this Note.
`
`A. PROMISE TO PAY
`
`i
`
`I promise to pay to your order according to the terms below:
`the sum of the Loan Amount Requested to the extent it is
`advanced to me, or on my behalf. which includes the
`Supplemental Fee (together the “Loan Amount"); other inter-
`est. fees and charges accrued or Capitalized on the Loan
`Amount as described in this Note; and, in the event of
`Default. reasonable attorneys‘ fees, court costs and collection
`agency fees to the extent permitted by law.
`
`3. DEFINITIONS
`1. Interim Peried - The “Interim Period” will begin on the
`Disbursem*nt Date. The Interim Period will end 4 1/2 years
`after the Disbursem*nt Date or 6 months after the student
`graduates or drops below half time enrollment at an eligible
`school. whichever is earlier.
`2. Repeyment Peried - The “Repayment Period" will begin on
`the day after the Interim Period ends. or eariier if elected (see
`Section D. Terms of Repayment) and will continue for up to
`360 months after the first principal and interest payment is
`due. until the loan is paid in full.
`3. Capitalized Interest end chet: Ameunts - From time to
`time. interest, fees or charges clue and not yet paid may be
`added. without notice, to the principal amount of the loan as
`provided in this Note. This addition is called “capitalizing" and
`such amounts are considered to be "Capitalized." Since
`interest accrues on the outstanding principal balance. capital-
`izing increases the total cost of the loan.
`4. Default - You may declare my loan in default following an
`event described in Section K. End to Interim Period; Whole
`Loan Due; Rate After Default except as follows:
`— IDAHO. IOWA. KANSAS. MAINE and SOUTH CAROLINA
`RESIDENTS ONLY: I will be in default if I fail to make a
`payment as required by this Note (or within 10 days of the
`time required by this Note. for Iowa residents). or if the
`prospect of my payment or performance is significantly
`impaired. The burden of establishing the prospect of
`significant impairment is on you.
`— WISCONSIN RESIDENTS ONLY: I will be in default (a) if I
`permit to be outstanding an amount exceeding one full pay-
`ment which has remained unpaid for more than 10 days
`alter its scheduled due date or deferred due date. or I fail to
`pay the first payment or the last payment within 40 days of
`its scheduled due date or deferred due date. or (b) if I fail to
`observe any other prevision of this Note. the breach of
`which materially impairs my ability to pay the amounts due
`under the Note.
`5. Disbursem*nt Date — The date shown on the first Loan
`check.
`
`6.WW — The Truth In Lending Disclosure
`Statement that will be sent prior to the time of the first
`Disbursem*nt Date and which is hereby incorporated into this
`Note.
`7. Additional Terms - The terms "Interest". "Late Charge",
`“Supplemental Fee". “Payment Return Fee". "Forbearance
`Fee". "Modification Fee" and “Collection Costs" are defined in
`the Note sections so titled. "Variable Rate". "Index". “Prime
`Rate". and "Margin" are defined under Section C. Interest.
`
`C. INTEREST
`1. Aeergel ef lntereg - Interest will accrue on the unpaid bal-
`ance of the Loan from the Disbursem*nt Date until payment in
`full at the Variable Rate (as defined below). The interest rate
`will not exceed the maximum allowed by law.
`2. Variable Bete - I will pay interest at a Variable Rate equal to
`the Index plus or minus the percentage identified on my
`Disclosure Statement (the “Margin"). rounded to the nearest
`one-fourth of one percent (0.25%). The Variable Rate will
`change on the first day of each month if the Index changes.
`The Index is the highest U.S. Prime Rate as published in The
`Wall Street Journal under the "Money Rates" section on the
`next to last New York business day of the prior month. A New
`York business day is defined as any day that is not a
`Saturday, Sunday. holiday or other day on which banking insti-
`tutions in New York are authorized or ordered to close by law
`or executive order.
`3. Wndex - If The Wall Street Journal is not pub-
`lished or the U.S. Prime Rate is not stated. then the Index will
`be determined by using the immediately preceding published
`highest U.S. Prime Rate.
`If the US. Prime Rate ceases to be
`available. you will choose a comparable substitute.
`
`D. TERMS OF REPAYMENT
`
`1. Payment Due Date - My loan payments are due on the date
`specified by you. All payments must be made in US. dollars
`at the address specified by you.
`2. Repeyment Eleetion: Bey Princieal and nterest While '11
`Scheel - If I elected to pay principal and interest while the stu-
`dent is in school, I agree to repay this loan in consecutive
`monthly payments of principal and interest with the first pay-
`ment due within 45 days after the first Disbursem*nt Date.
`3. Repayment Electien: Pey enly Interest flhile in School - If I
`elected to pay only interest while the student is in school or I
`did not make a choice, I will pay only interest on my loan dur-
`ing my Interim Period.
`I must pay principal and interest in
`consecutive monthly installments during my Repayment
`Period.
`
`4-W
`School - If I elected to defer principal and interest payments
`while the student is in school, I agree to repay this loan in
`consecutive monthly installments of principal and interest dur-
`ing my Repayment Period. Interest that accrues on my loan
`during the Interim Period is Capitalized at the start of my
`Repayment Period.
`5. Determining the Repayment Eeriod - When the Interim
`Period ends. you will detem'iine the Repayment Period for my
`loan. based on the then outstanding balance of my loan.
`
`s;
`
`

`

`.i. RIGHT TO PREPAY
`I have the right to prepay all or any part of my loan at any
`time without penalty.
`
`K. END OF INTERIM PERIOD: WHOLE LOAN DUE: RATE
`AFTER DEFAULT
`Subject to Section 3.4. Default. you have the right to cease to
`make further disbursem*nts to me and to give me notice that
`the Interim Period will end at once and the Repayment Period
`will begin immediately or to give me notice that the whole out-
`standing principal balance. accrued interest. and all other
`amounts payable to you under the terms of this Note are due
`and payable at once if:
`1.
`I fail to make any payment to you when due; or
`2. I fail to provide a notice required in Section M.1
`Notices/Change in My Information on time; or
`3. I break any of my other promises in this Note: or
`4. Any bankruptcy proceeding is begun by or against me and
`not dismissed within 60 days. or | assign any of my assets
`to or for the benefit of my creditors; or
`5. I make any false written statement in applying for this loan
`or at any time during the Interim Period or Repayment
`Period; or
`6. I die or any cosigner dies; or
`'7.
`I am in Default on any loans I may already have with youI or
`on any loans I may have with you in the future.
`You have these rights even if the listed event occurs during
`the Interim Period.
`In addition. if any of the listed events
`occur. I will be required to pay interest on this loan accruing
`afterwards at the Variable Rate applicable to this loan prior to
`such event plus 2%. The Variable Rate will be subject to
`adjustment in the same manner as before.
`
`L. COLLECTION COSTS
`I agree to pay you all
`Unless prohibited by applicable law.
`amounts. including reasonable attorneys' fees. and collection
`agency. court and other collection costs that you incur in
`enforcing the terms of this Note (collectively. "Collection
`Costs"). The Collection Costs that I agree to pay also include
`fees and costs incurred in connection with any appellate or
`bankruptcy proceedings.
`
`M. NOTICES
`
`1. Change in My Information - I will send written notice to
`you. or any subsequent holder of this Note. within 19 days
`after any change in my name. address or telephone’number or
`Schoot enrollment status.
`2. When Effective - Any notice required to be given to me by
`you will be effective when mailed to the latest address you
`have for me.
`
`3. Reports to Credit Bureau - You may report information
`about my account to any credit bureaus. Late payments,
`missed payments. or other defaults on my account may
`be reflected in my credit bureau report.
`4. Not Negotiable - This is a non-negotiable consumer note.
`5. FedeLal Notices - I understand that the following notice is
`required by federal law. [For purposes of this notice. the
`words "you" and “yours" mean the Cosigner(s) who signed
`the application, not the lender.]
`
`NOTICE TO COSIG NER:
`You are being asked to guarantee this debt. Think
`carefully before you do. If the borrower doesn't pay
`the debt. you will have to. Be sure you can afford to
`pay If you have to. and that you want to accept this
`responsibility.
`You may have to pay up to the full amount of the debt
`if the borrower does not pay. You may also have to
`pay late fees or collection costs. which increase this
`amount.
`The lender can collect this debt from you without first
`trying to collect from the borrower. The lender can use
`the same collection methods against you that can be
`used against the hammer. such as suing you. gar-
`nishing your wages. etc. If this debt is ever in default.
`that fact may become a part of your credit record.
`This notice is not the contract that makes you liable
`
`for the debt.
`HEREUNDER.
`
`I understand that the following notice is required by federal law
`and is only applicable to loans issued to finance educational
`expenses at for-profit educational institutions or institutions oth-
`erwise subject to the FTC Holder Rule under 16 C.F.R. §433.2.
`
`NOTICE:
`ANY HOLDER OF THIS CONSUMER CREDIT
`CONTRACT IS SUBJECT TO ALL CLAIMS
`AND DEFENSES WHICH THE DEBTOR
`COULD ASSERT AGAINST THE SELLER OF
`GOODS OR SERVICES OBTAINED WITH
`THE PROCEEDS HEREOF. RECOVERY
`HEREUNDER BY THE DEBTOR SHALL NOT
`EXCEED AMOUNTS PAID BY THE DEBTOR
`
`6.W - I understand that the following notices are
`required by or are necessary under state law and that these
`notices may not describe all of the rights that l have under
`state or federal law. Unless otherwise indicated. each notice
`applies to Borrowers and Cosigners who live in the indicated
`state on the date that they sign this Note and to Borrowers
`and Cosigners who are residents of that state.
`- CALIFORNIA RESIDENTS ONLY: A married applicant may
`apply for a separate account.
`— CALIFORNIA and UTAH RESIDENTS ONLY: As required
`by Catifornia and Utah law. I am hereby notified that a nega-
`tive credit report reflecting on my credit record may be sub-
`mitted to a credit reporting agency if I fail to fulfill the terms
`of my credit obligations.
`— IOWA and KANSAS RESIDENTS ONLY: (For purposes of
`the following notice to Iowa and Kansas residents. “you"
`means the borrower and co-borrower. not the lender.)
`NOTICE TO CONSUMER 1. Do not sign this paper before
`you read it. 2. You are entitled to a copy of this paper. 3.
`You may prepay the unpaid balance at any time without
`penalty and may be entitled to receive a refund of unearned
`charges in accordance with law.
`
`
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`
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`
`
`TuitionAnswerLoanApplicationandPromissoryNote2006~2007
`
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`

`

`_—
`
`P. CERTIFICATION AND CONSENT TO INFORMATION
`SHARING
`1. I certify that the information contained in the application is
`true, complete and correct to the best of my knowledge and
`belief and is made in good faith, that I am eligible for this loan
`and that i will repay it according to the terms of this Note.
`2. I authorize any school that the student may attend to
`release to you or your agents any requested information
`pertinent to this loan (e.g.. employment, enrollment status.
`current address) and advise you whether I am eligible for
`a future loan. I authorize you or your agents to check my
`credit and employment history for this loan and for future
`loans that may be offered to me, to answer questions
`about their credit experience with me. and to release the
`results of the credit review process to the School.
`| fur-
`ther authorize you to release any other information on
`this loan to the School or to other schools the student
`has attended for which I have taken out a student loan.
`3. I authorize you to verify my identity by comparing infor-
`mation provided by me with information obtained from a
`consumer reporting agency, public database or other
`source.
`
`4. l consent to the sharing of any information about this
`loan with my parent. guardian, child, spouse or sibling
`who complies with your procedures unless I revoke this
`consent or unless prohibited by law. I understand that
`I may revoke this consent by contacting the servicer at
`1-888-ZSALLIE or PO. Box 9500, Mikes-Barre, PA
`1 8173-9500.
`
`5. I certify that this loan is a qualified education loan as
`described in Section 221 (d)(1) of the Internal Revenue Code
`of 1986, 26 U.S.C. §221 (d)(1), and that therefore this loan
`is not dischargeable in bankruptcy except pursuant to 1 1
`U.S.C. §523 (a)(8).
`i understand that I must immediately
`repay any funds that I receive which cannot reasonably be
`attributed to meeting the student’s qualified higher education
`expenses related to attendance at the School. I understand
`that failure to complete the educational program undertaken
`by the student does not relieve me of any obligation on this
`Note.
`
`6. I also certify that: I have read the materials explaining the
`loan program that have been provided to me; I have read,
`understand and agree to the provisions of the program, my
`responsibilities and my rights under this program, the terms of
`this Note and this “Certification and Consent to Information
`Sharing."
`
`Ct. CORRECTION OF ERRORS
`
`
`
`
`
`
`
`Consequently. the provisions of this Note will be governed
`by federal laws and the laws of that State, to the extent
`not preempted, without regard to conflict of laws rules.
`4.
`I understand that if the information on my Disclosure
`Statement conflicts with this Note, the information on my
`Disclosure Statement applies.
`5. My failure to receive a statement does not relieve me of my
`obligation to make my required loan payments in accordance
`with the terms and conditions of this Note.
`
`6. By accepting past due payments you do not waive or affect
`any right to accelerate this Note. I waive any notice of dishon-
`or, notice of protest, presentment, demand for payment, and
`all other notices or demands in connection with this Note and
`consent to the addition of a party who will be liable upon this
`loan or any other loans l have outstanding under the program,
`to any and all extensions, renewals, or releases of any party
`liable upon this loan or any other loans I have outstanding
`under the program and to any waiver or modification that may
`be gr