I received a formal letter today (57 days past due

I received a formal letter today (57 days past due).

" Loan is now in default. This letter is sent as a courtesy to notify you of our intent to file legal action, unless payment is received by 05/15/2012. This serious step is taken reluctantly. However, our primary concern must be to protect our member's savings, which were loaned to you. A legal action could result in a court-ordered judgement against you. This becomes a part of your credit record, where it can remain for up to seven years. Please be aware that JFCU may provide information to credit bureaus about an insolvency, delinquency, late payment, or default on your account to include in your credit report."

1. If legal action is filed, what is my next step?
2. Who should I contact for legal guidance here?
3. If the credit union goes to court, what are the chances that I can get the debt lowered or bring other debtors into that action?
4. Could I even go to court without filing for bankruptcy? (I think no, and I can't file bankruptcy because of my job).

2 Answers

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The loan is an unsecured personal loan. Since I have no assets, what could a potential ruling be against me if they take me to court? Wage garnishment? 
Does a court case affect my credit negatively? I'm trying to guage how negative it is for me to go to court or try and work with them so they don't serve me. 

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1. If JFCU files a lawsuit against you, you will be served and you will need to appear in court or have the judge award a default judgement to JFCU.

2. Consult an attorney if you wish to.

3. Debt forgiveness is up to the judge's discretion. I don't think you can rope in other debtors under the same suit.

4. Yes, you can go to court without filing bankruptcy.

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