Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.
I usually see them enter into deferrals or forebearance agreements for the most part.
If they would agree to settle, you are correct, in that the savings would be taxable as income to you.
It could be charged to both, since you are both cosigned. Talk to your tax advisor, Usually it would be 50/50 to each party.
It would be unlikely that they would settle unless both parties have the hardship for the likely remainder of the loan.
let me know if you have any other questions, especially a bankruptcy question, since this is the category you are in!
Thanks, XXXXX XXXXX know. Terry
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