Cosigned on loan in collections - now what?

[Jammed]

I cosigned on my husband's private student loan years ago. We can't afford to repay any student loans (husband's are 40K and mine are 100K). We already used up all possible forbearances and deferrments.

I got a letter from DCS (Diversified Collection Services) trying to collect the entire balance of my husband's loan. I know student loans can garnish wages and take tax refunds. What about the collection company? The imcome based repayment isn't going to help because we can't afford 15% of our income. If I file BK that should hold this off for a while but once the BK ends will the collection company come back after me for a lump sum payoff? What are my other options?

[keepinitreal]

Don't panic. Just accept that you're gonna be getting a lot of phone calls and letters from them.

If you eventually get a real court summons then it will be time to start protecting your cash.

Now might be a good time to adjust your Federal withholding though, so you won't get much of a refund, if any, in the future.

Also, get a free consultation from a bankruptcy attorney so you can get some good financial advice. They may recommend that you file a Chapter 13 eventually to keep the student loan creditor at bay for 5 years.

[KeithDoxen]

You also need to distinguish between federal loans and private loans. Federal loans are a lot easier to collect than private loans. They don't even have to get a judgment in order to garnish your wages. Private loans operate under the same rules as other types of private debt, except that you can't discharge them in bankruptcy. This means that, as far as the private loans go, you don't have to worry about anything until you get sued, and that can take years from the time you default.

Asking what powers the collection agency has is the wrong way to think about it. At any time, whomever owns the debt can hire a law firm and sue you.

[AngelinaCatHub]

Have you heard of a Chapter 20? bk C7 if you intend to. This will sort out all debt. It may even adjust the loans a bit. After that, go C13 and the 13 can adjust down a private loan. It will buy you time also if Govmint goes the route of BK forgiveness on student loan. Otherwise at least the C13 will make paying it easier.

Anyone else with a better take? 'Hub