What would you do?

I'm in debt for about 4K in credit cards and the same in PDLs. I filed CH. 7 in '04, all was going well until a death in the family and moving to another residence. As a result, I resorted to the Pay Day loans and credit cards. Not just any cards, but the ones where the limit is $250, but the initial usage is only $75 dollars. This all happened very fast, from June '05 to Dec. '05, I was swimming in debt that I had not planned on. I still shake my head knowing that I should be 8K in the black vs. being in the red. I have defaulted on most of the PDLs. A couple have gone to collection. I didn't get in the credit mess until after the loans went haywire thinking that I could lessen the monthly payments by paying off a loan with a credit card. In theory, it works. But, only having access to $75 dollars or $120 dollars of a 250/300 dollar limit defeats the purpose. Needless to say, that didn't work and I've sacrificed so much because of a few unforseen twists. NOt only have I, but so has my kid and that's the bad part.
I recently received a settlement offer from one of the card companies. They've offer a %60 settlement on a $387 debt, which comes out to about $230. With the money I make, what if I "pooled" all money that I would pay on the othere cards, threw caution to the wind knowing that I'm totally screwed because of the Ch. 7, accept this initial settlement offer, and maybe show the other card companies that I'm willing to settle vs letting things go to collections? Most of the balances on these cards are so low that I could pay 1 or 2 off each month if offered a similar settlement like the %60 one. As far as the PDL's go, I've paid them back their money and then some and will not sacrifice my life anymore just to pad their pockets. My plan is to pay them very little each month regardless of their constant squawkin'.
I've assessed the credit situation. Believe it or not, I'm current on 3 cards and that's all I need. I'm willing to sacrifice the others knowing that my reports "blow" already, especially with the BK. I owe an unpaid balance to my bank after the PDLs got to much to handle. I closed the account and that cost me a negative collection on a credit score that was in the high 500s at best. So now I figure, "to hell with this" and have resigned myself to paying off what I can, forget credit since the BK has another 8 years to run its course and just go the cash route and use the limited credit that I still have in good standing. If I stopped paying them all, and they all went to collections, I have nothing to lose. It's not like I'm trying to impress Amex or Bank of America or something, right?
So, tell me, what would you do? Good plan? Bad plan? Let me know.