I am sorry to hear you are feeling so troubled. Been there. When the bill collectors started calling I told them to go to hell. That was when I was drinking, unfortunately that doesn't make me immune and I still had to pay off my debts. Needless to say this is indeed quite a stressful situation and it can drive you nuts. For me, there was a terrible gnawing in my gut. No matter how much I had, I knew I owed a ton of money to someone and they were coming for it...and when it's a lot of money, they WILL come for it.
Can you settle? I worked with my card companies - I had gone into trouble with a few of them. When I stopped using my cards they asked me if I would like to settle. I worked with all of them and got my payments reduced. It was hard but it works. In another case I dealt with collections, then legal action was taken. I got the action dismissed by working with the law firm who was pursuing my suit. I only ended up paying about half of what I owed.
Again, I am just trying to relate my experience. Someone above suggested credit counceling - I have never gone but I would go in a heartbeat, knowing what I know now. GOOD LUCK, and remember being sober throughout this will help big time.