Is the relationship still good with the employer/lender? If so, then perhaps they would agree to a different repayment schedule - perhaps the installment payment schedule you indicated in your post. If everybody agrees, then you can put that new payment schedule agreement in writing. If the relationship isn't good, or the employer won't agree to a different payment schedule, then I suggest you speak to an attorney regarding your legal options on defaulting, whether they could get more interest or attorneys fees, etc. Some attorneys do offer free consultations. You can find more information about one through the attorney locator service on LawInfo's home page at: http://www.lawinfo.com/. Good luck!