Unfortunately, while the bank took the loss, it can make an arrangement for a debt collector to pursue collection, either by selling its rights to the debt to the debt collector, or allowing the debt collector to attempt collection on a contingency basis where both parties get a percentage of the amount collected. Interest and fees, such as the collection agency's fee for pursuing these claims on the creditor's behalf can be charged to you. This is because the lender stated (almost surely) in its agreement with you at the time of the loan, that if you defaulted then you would be responsible for interest that accrued and fees that arose, such as hiring a debt collector or attorney that is needed to attempt to collect the debt.


The statute of limitations on the debt would be 6 years, but all that means is that if a party is going to sue based on the debt, that party must do so within 6 years. Once that party, most likely to be the debt collector, does this then the collector has 10 years to collect on the judgment and can renew it for another 10 years as well.


That said, the judgment would give the creditor the ability to garnish 10% of your wages, property, and bank accounts, with social security and unemployment payments being exempt from garnishment.


You could contact the creditor, or have an attorney contact the creditor and try and work out a settlement, perhaps for 30% or 50% of the amount owed. Possibly approaching the bank saying that you have a lump sum of money (if that is the case), but many creditors, and you're trying to use that money to most effectively eliminate debts, and if the creditor will give you a signed settlement and release agreement for the entire debt, you will settle it by paying a fraction of the amount owed; but also state that you are making this offer to other creditors and paying off the creditors that give you the best deals for your money and that you would like the creditor to consider that in negotiating the payment that it will accept to satisfy the debt.


Another option is to simply avoid paying, but this would be more difficult if you have wages, property or bank accounts.


Another option would be bankruptcy, which terminates most debts, but that comes with its tough side as well such as bad credit rating which would make it difficult to borrow money at least for a time.


I'm sorry that this is such a tough spot to be in, but I I hope you found this description of your options to be helpful. If you have any other questions, please let me know.


Thank you,
Jim