​[or / In] Co-signer On Car Loan. Co-borrower Surrendered Car Then Passed Away. Bank Is Sending A $10k Deficiency Balance To A Lawyer. Can I Negotiate A Lump-sum Settlement?

Location: Oregon and loan is in indiana.

I am in a really terrible situation and never thought I would be dealing with something like this. I'm hoping someone here has experience with creditors and collection lawyers and can give me some realistic advice.

About 5 years ago, I took out/co-signed an auto loan to help out a close friend. They still owed about $10,000 on the loan. Recently, they were in a really bad accident and couldn't drive anymore, and the car's transmission was completely blown out (it was a 2017 Ford Fusion).

Without telling me, my friend voluntarily surrendered the broken car to the bank. Tragically, shortly after this happened, my friend took their own life.

Because my name is on the loan, I am now entirely on the hook for it. I just received a deficiency notice from the bank. Because the transmission was blown and the car was damaged, it depreciated heavily and only sold for $2,000 at auction. After fees, I am now legally on the hook for the remaining balance, which is around $10,000.

I called the bank immediately and tried to get them to work with me given the extreme and tragic circumstances. The bank flat-out told me they don't care, they are not going to work with me on a resolution, and because of the amount owed, they are referring the account to a lawyer next week to take legal action.

I simply do not have $10,000. Coming up with that kind of money right now would literally put me out of house and home.

Since the bank refused to help, what are my options when this lawyer contacts me? Is it possible to negotiate directly with the attorney's team to avoid a lawsuit? If I can somehow scrape together a partial payment, would a collection lawyer accept something like 50% to settle the account and make this go away? Any advice on how to handle the lawyer next week would be incredibly appreciated. Been freaking the hell out about this and never been in a situation like this before, mourning the loss of one of my closest friends and now this debt I'd never thought I'd ever need to worry about as they were doing great all these years... Thank you.

Just to add some important context, I cannot file for bankruptcy right now because I recently took out a loan, and I can't afford to hire a lawyer to fight this unless I happen to find one working pro bono. I am currently unemployed, actively looking for work, I rent, I have my own car loan through a bank in my current state, and I have zero assets for them to seize. However, I do have exactly $4,000 in cash saved up from unemployment. Which I am hoping their team might accept as a settlement? Given the loan is 5 years old and they want some sort of payment to recoup. The letter I got was a deficiency letter saying not only do I owe 10k but now it's going to continue to increase and add more onto it per day at 2.66 bucks a day until it's paid...