Generally, credit worthiness is not an issue for federally guaranteed loans (e.g. stafford loans, etc), but for private student loans, the judgments will be a problem.
Candidly, there are other issues here, you really don't want these debts to go to judgment. If they do, you are going to have to play cat and mouse with them for many years, have no bank accounts etc.
You should file bankruptcy now, deal with these debts and move on with a clean slate.
As stated, generally government guaranteed student loans are not withheld based on your credit. However, privately funded ones can be.
I do not agree with the other attorney that you should just file bankruptcy now and get it over with. The "get out of debt free" card is available only once every eight (8) years. Hoard it and save it for when you REALLY need it. Hopefully, your one credit card did not have a large credit limit, so you should focus on making payments on it to pay it off. (You don't need an agreement to send them payments, they will accept partial payments.) Just keep track of the payments you make to ensure you are credited for them properly.
If you need further clarity, please email me at MICHAEL@MIRELAND.US Answers to questions are for general information purposes only and do not establish an attorney-client relationship. This is not legal advice, simply information. You SHOULD NOT act on this information without consulting a competent bankruptcy attorney in your area and providing ALL relevant information.
I would agree with my colleague. Federal student loans may not be an issue because they cannot be discharged in bankruptcy and the federal lender can garnish wages. Federal student lenders thus don't care about your credit because there is a high probability they will get their money back and the loans are guaranteed by the feds. Private student loans also cannot be discharged in bankruptcy, but in order to garnish wages they first have to sue and get a judgment if a default occurs. So in this respect they are more like other creditors and will be hesitant about extending student loans to you if you have outstanding judgments.
You need to decide what you are going to do about the judgment. While bankruptcy is an option, it will depend on your overall level of debt. Bankruptcy is not without its own consequences (you will be prohibited from re-filing and getting another discharge for possibly 8 years). More importantly, it costs money and you need to decide if your level of debt justifies it. My ballpark rule of thumb is that you should have at least $10,000 in dischargeable debt before you should consider it.
My colleague is correct though that you do need to think about resolving this credit card debt. Other options, if bankruptcy is not right for you, may be debt settlement or debt consolidation.
If you are interested in bankruptcy, many attorneys give free consults. You should take advantage of this and educate yourself on the process and types of bankruptcy. If bankruptcy is not right for you and you are considering settlement in a non-litigation non-bankruptcy context, please email me at email@example.com. I would be pleased to assist in resolving the debt for a reasonable fee.
As my colleagues point out, you should have no problem with federal student loans, because they are generally not based upon your credit history.
Nonetheless, you should try to resolve this debt before it reaches judgment is possible. A creditor's options for collecting on a judgment are somewhat limited in Pennsylvania, because there is no wage garnishment in this state for this type of debt. However, it can attempt to levy your bank account (if it knows where you bank) or personal property to satisfy the judgment. In addition, a judgment will drag down your credit rating.
I suggest that you get in touch with a local attorney who handles debt negotiation and bankruptcy to explore all of your options. If you file for bankruptcy, it should not prevent you from obtaining federal student loans. However, if this is your only debt, a negotiated settlement is probably a better option.
To reach me call 215-248-0989. Harborstone Law Group serves Philadelphia, Montgomery, Delaware, and Bucks Counties in Pennsylvania. Answers to any question on this forum are for general information purposes only and do not constitute legal advice or establish an attorney-client relationship between Harborstone Law Group or its attorneys and you. This type of forum cannot substitute for a consultation with an attorney.
I also do not agree with the "file bankruptcy now" advice. You haven't mentioned how much the lawsuit is for or what other debt you have. That advice was very irresponsible, please don't give it much weight.
You haven't mentioned which company is suing you or how much the debt it. Please know that a good consumer attorney/law firm can successfully defend many credit card lawsuits and that most of us give free consults.