In Which State Can a Creditor Sue Me

[KeithDoxen]

My question involves collection proceedings in the State of: North Carolina

This is an interesting civil procedure/choice of law question that may affect me in the near future and I'm hoping that some of the attorneys on this site can give me an answer.

I went to graduate school in Washington, DC. In so doing, I racked up six figures of student loan debt, assuming that I would have a six figure job within a few years of building my career after graduation. When the economy went south, so did my career. I am currently working, but only making 50k a year, while my student loans total about 200k. About 50k is federally-backed, which I have deferred. The other 150k is comprised of a series of PRIVATE student loans with no government guarantee or backing. They are owned by a major private student loan company, Access Group.

When I was going to school in DC, I was living across the Potomac in Virginia. I took out about half of the private student loans as a Virginia resident. Then I switched apartments and didn't want to deal with the hassle of changing my address a million times, so I used my parents' address in Michigan as my home address when I took out the other half of the private student loans. So some of the loans have a promissory note that I signed as a Virginia resident, and the rest of the loans I signed as a Michigan resident, all while I was going to school in DC.

After grad school I worked for several years as a Virginia resident, got laid off multiple times, and defaulted on my private student loans. It's been about a year since default and no one has sued me yet. But I am now working in North Carolina and am making the transition to North Carolina residency as we speak (changing addresses, etc). My question is: if Access Group decides to sue, say, tomorrow, where would they be able to file suit against me? I took out the loans as a Virginia resident, I took out more loans as a Michigan resident, all the loans were used for a school in DC, I paid on all of them and defaulted on all as a Virginia resident, and now I'm a North Carolina resident. Is there a clear legal answer on this issue?

[Dogmatique]

You would generally be sued where you CURRENTLY reside.

[KeithDoxen]

So the state where the agreement was made basically is irrelevant then?

That is to say, I won't be found to have minimum contacts with, say, Virginia because I signed some of the promissory notes as a Virginia resident, thus allowing me to be sued in Virginia?

What if my employer is based in another state? Does that impact anything?

Sorry for all the questions, I just want to make sure that I am protected by North Carolina law if I am sued, so that I can start researching the law to see what my rights are.

[Dogmatique]

I'll modify my answer somewhat.

The creditors can also sue you at the last known address on file. This will often result in a default judgment.

[KeithDoxen]

I'll modify my answer somewhat.

The creditors can also sue you at the last known address on file. This will often result in a default judgment.

So basically, it would be better for me to update my address with my creditors even if I'm unable to negotiate a payment with them right now so that I don't end up getting sued out of state and not knowing about it?

I take it that I would have to contact the creditors to change my address, and that it wouldn't be enough that I have moved, registered my car with a new state, changed my mailing address with the post office, etc? In other words, even if the creditor tries to serve process at my last address on file and finds that the person living there has no idea who I am, they can still successfully serve by publication in that state because that's the last address on file?

[Dogmatique]

In a nutshell yes, they can successfully serve you via publication.

I'd do whatever I could to negotiate and at the same time formally give them the new contact information. There's every chance that since you already changed everything via "change of address form" via the post office that they have it anyway but it is, in my opinion, better to make sure that they DO have the new information just in case.

[KeithDoxen]

Thanks for your replies.

Also, I should probably also ask if anyone has any insight into the choice of law issue.

Let's say the creditor sued me in North Carolina. Would North Carolina apply its rules on property exempt from garnishments, etc, or would it instead use Virginia law given that Virginia is where the promissory notes were signed? (Though since some of the notes were signed while I was a Michigan resident, it seems that Virginia law couldn't be applied to all of them.) I've looked at the promissory notes and can't find any choice of law provisions.

[Dogmatique]

Because NC is where you now reside, NC's exemptions would apply.