I'm sorry to hear that your son and your family is in such a position. I really feel for you. However, he's not in as bad a position with the loans as you might think.
My first thought that crosses my mind is loan discharge depending on where he went to school online and the circumstances surrounding his enrollment. If he was bi-polar and off his meds at the time, there might be something there. I don't know too much about loan discharge on this topic. I'll help you however I can. The second possibility is to attach it from there other end. Try to get him listed as disabled. Disabled people can still work without penalty. I'm not sure what would be needed to get the loan forgiven this way but I do know that is another possibility with student loans.
Putting that aside, you can get him current now. They do not need a judgement. His loans are probably in default. Federal loans are different. They can garnish his wages, take his tax refund... Eventually they will take from his social security check. These loans never just go away. There are a few other recent posts I've given detailed answers how to get out of it. Basically the government gives you one opportunity to get your loans out of default. There is rehabbing and consultation. Rehabbing are more payments, approx 9 I think, but when he's done it will remove it from his credit report. I would start by contacting the collection agency that is handling his loans. The name should be on the paperwork that was sent to your son. If not, no worries.
First step, go to the student loan government website. He needs to update his contact information. Second, go to the National Student Loan Database, NSLDS, government site which will list his loans. There should only be loans for the periods he was in school. The rest can be discharged later as the school was supposed to return them. This website usually lists the most current servicer or in his case collection agency. If not, just contact Dept of Education to find out. Save this information. You'll want to make sure it pretty much matches the collection agency stuff, including that they are not collecting on paid off loans.
Contact the collection agency and get copies of all the paperwork you can. The ones I've talked to and read about are really shifty. Their only goal is to make money, don't expect the whole truth from them. Tell them you want to rehab the loans (or consolidate). This decision can't be taken back once you finish and off it defaults again, the loans stay there. You must complete all the payments on time. The payments can be adjusted to his financial situation, as most people cannot afford the standard payments anyway. They will need his financial information, income, bills etc. They don't need your credit report.
Once you set up rehab and make the payment, the garnishment will stop. He's probably not supposed to be garnished very much, if anything anyway because he's minimum wage, but that's irrelevant.
When you're done with rehab, a loan servicer will pick up the loans. Continue to make payments as directed until then. You'll need to have him pick a payment plan. Now here is where most people don't know about income-driven repayment plans. Payments can be as low as $0. IBR or REPAYE would probably be the lowest for him. He does have to remember to certify annually. It's easy, application takes about 10 minutes. I can give you more details.
Any questions? I'll look up the discharge information in case it interests you. Let me know if you'd like links to the websites and information above.
