Citifinancial Suit

I'll try to keep this as clear as possible, but here's what has lead me to this site:
I'm a 30 yr old, NJ resident. I was one of many let go from my place of employment in 2009, collected UI for 8 months, before taking a job that paid less than even my UI benefits (out of fear that this is a "take what you can get" job market), but was able to keep myself afloat until this past September, when I had a serious car accident, and was out of work for over 2 months. As many know, disability insurance is neither fast-moving, nor much to live off of, so in the 9 weeks I was out of work, I couldnt pay a single bill, other than my portion of mortgage on a home I am in with family, and got 2 months behind on all of my payments, leading to large past-due amounts, that I could not afford. When I finally was able to return to work, they had hired another person, so the only available hours to me since, have been about 20 hours per week, 1/2 of what I had been working before my accident. So basically, when all is said and done, this has left me making about 1/3 of the income I was making just 3 years ago. I know this is happeneing all over now'a days, but I just wanted to explain how I got where I am.

Now, on to what I'm really here for... I was served a summons on March 3rd from attorneys representing Citifinancial, for a loan that I had taken out with them in 2007, and was up-to-date with until Sept 2010. The payments were roughly $280 per month. My mother had co-signed this loan since I didn't have much credit history, so she has also recieved a summons as well. The sum for which the suit was instituted is the remaining principal, plus interest (total $7536.82), and then the summons has other fees and costs tacted on as well, with $7768.56 being the Total.

I am considering contacting the lawyer, and trying to set up payments that I can afford (only about $100 per month), but I'm a bit unsure of how this works. Do they just stop suit if we come to an agreement on payments? Should I answer the complaint with the courts, even if I talk to the lawyers and come to an agreement? Is the complaint on my mother still in effect if we reach an agreement? Can they take more from me than the payments agreed upon?

Basically, I'm trying to figure out the best way to go about this, while keeping my, and my mothers bums covered. I have no qualms with trying to make payments on this, I just don't want to go about it the wrong way, without real knowledge of the law and my rights.

I may end up filing bankruptcy at some point, since I have cc's Ive ended up deliquent on, and cant afford to even pay one.... and now creeping up on over $50,000 in medical bills (c/o accident), but I'd really like to keep this loan off of it, seeing that my mother is involved with it as well.

Thanks in advance!