The payments have always been ridiculously high ($400+ per month) so I've only paid what I can afford and then we were so broke I couldn't afford it at all and then I lost track of the paperwork and payments and now they have filed a suit against me for the full amount. The problem is that we do not have money. We barely have enough money to pay the bills, which is pretty standard in this economy, so how can they expect me to just hand over $40k? Or to make $1200 payments every month? And if I go to court, what can they say besides, pay what you can afford? We don't have anything to sell besides our cars and our cars would be maybe $10k total. I don't know what to do.
Elder Law Attorney
The first thing to do is to contact the lender. Student loan programs have deferment programs, as well as loan forgiveness programs. See if you qualify for any of these. You should defend against the suit as best as you can. Retain the services of an attorney if possible. Poverty is no defense to a suit. In other words, the fact that you cannot pay the loan because you do not have money will not persuade the court to grant judgment in your favor. Your wages could be garnished, your bank account attached and/or a lien could be placed against your home. Do not ignore the suit.
1 lawyer agrees
Car / Auto Accident Lawyer
I'm sorry to say, Student debt is only dischargeable in extreme conditions (undue burden). However you may want to consider bankruptcy if you have a lot of other, dischargeable debt.
If they have not filed a lawsuit yet I would contact the lender [do not give them any information regarding your money or assets, etc.], and ask them for a payment arraignment for something that you can afford (example: monthly payments of $100.)
They would want to see proof of financial hardship, so show them either your check stubs or your bank account balance. But remember, just as others have posted, any funds, assets, or property you have in your name is vulnerable.
You mentioned "us" having cars in our name. Unless you have property under your name its not yours to give or for them to take.
If they have filed a lawsuit already, DO NOT do anything except hire a lawyer. That lawyer will defend you and probably negotiate something on your behalf.
Either way Contact an attorney experienced in this area for advice.
So don't stress out too much over debt, we all have debt, its just part of life. Pay what you can and live your life.