Avoiding Court

I am in the process of being sued by a loan collection company for a student loan (HESSA) that is in default. I was listed as the the cosigner and the loan was for my grandson who graduated in 2008. The signature on the loan application has been forged by my daughter. This has already been verified as my daughter's signature. I as a parent want to avoid court at all costs. My attorney has advised me to file a police report. As we know once this process is started it cannot be stopped I would like to put forth a scenario where everyone avoids court and my daughter avoids fraud charges. I would like a legally binding contract between me and my daughter with the terms listed as follows: 1. My daughter is to start repaying the loan company to get the loan out of arrears 2. A written contract where the balance of the loan will be paid until repayment is complete 3. For collateral on this debt of approximately $30,000 she will sign over the deed to her house 4. If for any reason payments are discontinued I retain the deed to the house My current and soon-to-be ex-attorney has advised me against my proposed scenario as it "can be perceived as a threat" this concept eludes me as I am trying to avoid further legal expenses on my behalf as well as my daughters as well as the possibility of losing the family assets such as the house,a large fine and jail time as well as the public humiliation of pressing charges against my daughter. Is there any legal way whether my proposed scenario or otherwise to avoid this?