Legal Question in Credit and Debt Law in Georgia

Neither I nor an attorney has seen the papers so I cannot answer here.

If this is a government student loan, then the government can get an administrative garnishment if the loan is not repaid.

If this is a private student lender, they would first have to get a judgment against your wife and they could then garnish her wages.

If you are getting unemployment you and your wife need to have separate bank accounts. Unemployment compensation is exempt from garnishment but not if you commingle it. Since your wife does not work she needs to have no bank account.

Any car must be financed or else solely in your name if only your wife is liable for the student loan debt.

You do not appear to have any other assets, but you need to make sure that nothing is in your wife's name for as long as she has a judgment against her.

There may be programs to help your wife through the US Department of Education - unless this was a purely private student loan.

However, your wife being served papers sounds like she has been sued. If that is the case, then she is really going to need to have the papers reviewed by an attorney to at least see what she has.

Assuming there are no legal defenses, being sued is no big deal - its what the creditor can do with the judgment that matters. A creditor can use any judgment to garnish wages (and wages can be garnished indefinitely until a judgment is paid), bank accounts can be levied or any assets owned free and clear can be seized. If your wife does not work, has no bank accounts and owns nothing, then there is nothing a creditor can do to her.

If your wife plans on working some day, she will need to think about resolving the judgment. Bankruptcy will not help as student loans are not dischargeable in bankruptcy absent proof of hardship - such as injury/disability.