The New York Times has a cautionary tale about documents: Don’t lose them. In this case, misplaced papers could mean $5 billion in student loan debt disappears. Saying the dog ate their homework won’t work for these lenders.

Judges have already dismissed dozens of lawsuits against former students, essentially wiping out their debt, because documents proving who owns the loans are missing. A review of court records by The New York Times shows that many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation.

Samantha Watson, whose experience is used to illustrate the story, said she didn’t completely understand the legalese on her loan and fell behind in payments. Then she got sued, and the situation worsened.

When National Collegiate sued her, the paperwork it submitted was a mess, according to her lawyer, Kevin Thomas of the New York Legal Assistance Group. At one point, National Collegiate presented documents saying that Ms. Watson had enrolled at a school she never attended, Mr. Thomas said.

Practice management software has come a long way, and developers are doing amazing things with it. Of course, law firms could always hope hackers hit their systems with ransomware as a way to safeguard their data. But that’s probably not advisable.


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