Legal question

They could get a judgment against you and go after your wages, however that is highly unlikely. Plus it also depends what state you live in. Some states will not allow for it. If they are already taking you to court and you have a court date set. I wouldnt send them another penny. I would go to court, tell them that you are willing to make a one time payment of X amount...whatever the 80% of the debt is that you have. (you didnt state how much the loan amount that is outstanding is.) Typically you can debtors to take a payment equivalent to half of the amount outstanding that is overdue. Make sure that you go to court wearing only modest clothing. No jewelry, no top of the line clothing...just presentable...dont look like you have a lot of money. Just look like a fine outstanding citizen, explain to the judge that you have tried working with them but they are threatening you. Tell the judge that you can afford half of the amount owed right now and will pay them that if they will settle with that amount, cease any and all past, present and future collections, and report to all three credit bureaus that this debt has been legally settled for less than balance. If you feel uneasy about doing this, then I would suggest you consult an attorney and have him present at the court date.

Have you contacted a lawyer. My advice is not to go to court by yourself. It is much easier to get a deal in your favor if you have a lawyer with you.