Nelson & Kennard Arrowood Indemnity Company Fraudulent loan collection Sacramento, California

Nelson & Kennard bought a Student Loan from CitiBank that was in dispute.  We did sign an application for a student loan with CitiBank and many others.  We were not aware of an approval and no funds were received by the university.  There was never and still is no Promissory Note and no Original Loan Document.  There is only a one page faxed copy application, which I did indeed sign.  This document clearly states it is an Application for a Student Loan.  This document clearly states that my signature does not imply acceptance or loan approval by CitiBank.  It also states that upon request a copy of the Promissory Note will be provided immediately.  I have been waiting for the Promissory Note since 1998.  I was bullied into paying a good portion of the loan, while they were to be finding the Promissory Note or Original Loan Document with my signature.  No documents were found and Nelson & Kennard bought this debt and filed against me.  I was given 20 days to respond to a claim. I could not and did not know how to respond.  By the time I figured out what to do the time had passed.  

In the meantime they filed against my daughter and currently are trying to collect the same debt under different actions from both of us.  My daughter did respond in time and has been in discovery.  In the meantime, I have received a Notice of Scheduled Trial Date.  I do not know what to do. The paperwork my daughter has received through Discovery is: an application for a student loan, a document that states the Promissory Note and Loan Document are missing, an insurance certificate paid receipt for the amount of the loan to CitiBank. Is this legal?