The situation:
I took out a private student loan from Wells Fargo several years ago with an interest rate of 12%. Once I graduated I had trouble affording to pay it back, partly because of the insane interest rate, and so eventually I defaulted on the loan, which I thought wasn’t half bad since I was told that actually stops interest from continuing to accrue (though I understand this has a very negative effect on my credit). Shortly after defaulting Wells Fargo threatened that they would file a law suit if I didn’t settle or otherwise make a payment arrangement, and so I agreed to an arrangement since I didn’t have cash for a lump sum settlement. The payment arrangement I agreed to was to pay nearly $1K/month over three years (the loan had ballooned to about $33K from the original $20K due to interest before I finally defaulted).

I had made payments on the arrangement for little over half a year when I got a law suit from Wells Fargo for an old credit card that I had stopped making payments on several years prior (after getting laid off from a job), and soon after started to get my wages garnished (25% of my income on wage garnishments). Around the same time I also had a medical emergency and was hospitalized (and got stuck paying several thousands of dollars in medical bills that my health insurance company refused to pay for). As a result I stopped making payments per the arrangement I had made with Wells Fargo for my private student loan.

Very recently I got a much better paying job (I now make almost $100K/year). I’ve taken care of all my outstanding medical bills and paid off all my credit cards. The only outstanding loans I have now are my car loan which is about half paid off now and my student loans (mix of both private and FedLoans) – that still includes this defaulted loan from Wells Fargo (all my other student loans are in good standing). I have now been ignoring the Wells Fargo student loan for about a year… just last month I got snail mail from a law firm saying that they represent Wells Fargo and were confirming my debt, and then then just last week I got another lettering from the same firm saying that they are attempting to resolve the debt and they are going to take legal actions against me to collect the debt if I do not respond and resolve (I assumes that means a law suit followed by garnishments).

I haven’t contacted Wells Fargo yet and want to get some advice before I proceed. I spoke to a family friend who is a lawyer, but does not specialize in anything related to finance. He had suggested I send a physical letter to Wells Fargo making a low ball offer of around $5K to $10K to settle the loan, but from what I’ve read online I am not too sure that is the best course of action. Most settlements I’ve read about are 50%+ of the original loan amount.

Another bit of information that might be of use is that I am seriously considering moving to Asia in about 6 months from now (for a period of about 3 to 5 years). I am not sure how quickly Wells Fargo will likely sue me, but if I can’t be sued if I am out of the country I am thinking maybe I can just allow the statute of limitations expire (which I understand as being 4 years in California for private student loans). One concern I have with that though is if I come back to the USA to visit home for any period of time how likely would it would be that they would be able serve me paper for suit. Also, I am not sure if they have the power ask the court for an order to keep track of me entering and exiting the country, to know my destination(s), etc.

Main Questions:
1. If I can consolidate my student loans, generally speaking, will any bank consider consolidating with a defaulted student loan?
2. If I contact Wells Fargo and TRY to have the loan settled for a lump sum, what is the least amount on money they would likely be willing to settle for? Just the principal, or maybe 50-20%?
3. Any other advise for someone in my position? I am not sure if I am even asking the correct questions…