I owe about $160,000 in Parent Plus Loans.  Our plan to pay for our kids education was to make the plus loan payments, sell our house after the last one went to college, put whatever equity we get into paying down the loans, downsize our home or maybe just live out our days in an apartment to free up some cash flow, sell some investment property (commercial land, not income producing), and that would cover it.  The plan has blown up in my face.  It is very tough to sell any real estate now, but we are having everything listed.  On top of it all, my income has plummeted since many of our clients have gone out of business.  Our income will not allow us to pay for our mortgage, Plus Loans and living expenses.  Rebuilding the business will take a long time, if it is even possible.  Same goes for selling off assets in today’s economy.  My wife retires in about 3 1/2 years from teaching.  I am the one who signed the MPNs.  What is the worst case scenario?  It is my understanding they cannot do anything to my wife since I am the one who signed.  It appears that they can get medieval with me, though.  Can they do more to us than garnish my salary and social security and keep our tax refunds?  I’d be more than happy to sign over our investment property and my undivided interest in other real estate held with extended family if that would take care of it, but it appears they only take cash.

I am working on in school deferment since one has about a year left in graduate school (which she is paying for) and the youngest has about a year and half left and I don’t see how I can justify signing a MPN for the last year of her first four years since I can’t, in my mind, tell anyone how I expect to pay for what has happened already unless our small firm suddenly turns around tremedously (which seems unlikely), properties sell and the like.

It seems that I may be able to get in school deferments.  That would help for a year.  After that, if the firm doesn’t improve enough and properties remain unsold, I may be able to get a low income forbearance for three years.  After that, I have no idea other than the fact that the balance will have grown to over $200,000 unless I’m able to pay a little towards interest every now and then.

I’ve looked at some of the posts here before posting this, my first one, and am not sure anyone can help.  What I’m looking for is some idea of what the worst case scenario could look like.  Is my wife really protected or can they go after her, too, even though I am the only one to sign a MPN?  I’m so afraid that I may have ruined her life.