Should I Agree to a Repayment Plan for a Student Loan?

Full question:

Ten years ago I co signed on a student loan. The loan officer is taking me to court on a civil judgement. Since then the owner of the loan has come forward and set up a payment plan to pay off the loan. But the loan officer still wants me to sign a paper stating that I will also make payments to this account or he will still file a civil judgement against me. Do I sign? I am afraid because that's how I got into this situation in the first place. HELP.

• Category: Debts and Credit
• Date: 04/07/2025
• State: Texas

Answer:

If you refer to signing a payment plan agreement that contains a clause allowing the creditor to sue in court if you default in the payment plan, the lender would likely be able to sue whether you agree to a payment plan or not. Typically, a lender will not agree to not sue on a legal claim unless the debt is paid off. If you are unsure of what you are signing, we suggest you ask the lender to explain it to meet your understanding or consult a local attorney who can review all the facts and documents involved. We are prohibited from giving legal advice, as this service provides information of a general legal nature.

Once a judgment is obtained, the creditor will likely be unwilling to negotiate a settlement and may place liens on property, such as bank accounts, or garnish wages. In some cases, a debtor may be able to negotiate a settlement with the creditor, although this is more difficult once a suit has been filed. In some cases, the creditor may settle for a lesser amount if the debtor is insolvent, since a promise to pay something is better than collecting nothing. These types of agreements are called an accord and satisfaction. If it is possible, a debtor should get a release included in such an agreement so that the creditor may not pursue the full balance of the debt claimed.