Only a bankruptcy attorney can tell you after sitting down with you and fully examining your particular circumstances. I recommend attorneys Stephen Harkess or Holly Benham.
The information provided in this answer does not create an attorney-client relationship. If you are interested in his legal services, feel free to call Chris at (303) 409-7635 at his law office in the Denver Tech Center. All initial consultations are free of charge.
People in your situation may be "judgment proof."
Just because someone is judgment proof may not stop collection efforts, including lawsuits, by creditors or collection agencies and attorneys. If appropriate, bankruptcy can stop the collection efforts, and that may benefit even people who are otherwise judgment proof.
With what's at stake, consulting with an experienced bankruptcy attorney licensed to practice in your state may be a good idea.
If you want to know more about the meaning of certain key words used in bankruptcy, see the federal courts' web site for a glossary of bankruptcy terms: http://www.uscourts.gov/Common/Glossary.aspx.
My law firm is a federally designated debt relief agency and helps people in Colorado file for bankruptcy relief under chapters 7 and 13 of the Bankruptcy Code.
Bankruptcy may be appropriate for you, but without more information it is difficult to say. If you have no income and no assets there is little financial damage that your creditors can do. If you hope/plan to return to work at some point, then creditor judgments can lead to wage and bank garnishments if you do not take some sort of action. I suggest you schedule an initial consultation with a bankruptcy attorney who can evaluate your situation and offer guidance and assistance.
Attorneys Bowinski and Hunt gave you some good advice. I believe that you should sit down with competent bankruptcy counsel to consider your whole situation. A key part of your discussion with counsel should likely be whether you are eligible for a student loan deferment, forbearance or undue hardship discharge, and if so, when and how to address the issue.
When searching for counsel, I recommend that you interview several attorneys; find counsel with whom you can place your confidence; and remember that a firm quoting you the lowest fee may not be the best for you. You may want to ask yourself: 1) is the lawyer presenting me with a drive-in, cookie cutter, service? 2) am I unique, or am I just a "number"? 3) will I get the full attention of counsel? 4) does the lawyer present him/herself and his/her service as fungible commodities? 5) does my situation require the attention of a very experienced attorney?
Good luck as you go through this difficult time.
Law Offices of Paul M. Gaide
Paul M. Gaide, Esquire
P.O. Box 280312
Lakewood, Colorado 80228-0312
Licensed in: CO, CT and MA