I have a friend that owed $40,000 with interest in student loans to Sallie Mae for going to a cooking school in Manhattan. He decided to just stop paying the loan one day. He got a few letters and phone calls from Sallie Mae and then they gave up trying to collect and just sold the loan to some collection agency in Buffalo. My friend just refused to pay a dime to Sallie Mae. The collection agency in Buffalo sent him a letter offering to settle for $11,000, a $29,000 reduction from what he owed to Sallie Mae. He refused to pay that too. It has been a couple of years since he first received that letter from the collection agency in Buffalo and they have not taken him to court. My 4 questions are... 1) Can a collection agency sue you in court for a student loan or any other kind of debt that you owe? 2) Can a collection agency seize assets that you have like a home, car, or bank and brokerage account to pay off debts or can they only garnish your wages? 3) If you are self-employed, how would they be able to garnish your wages? 4) Can a collection agency garnish social security income, disability income, or unemployment compensation?