Bankruptcy vs. collection agency payoff

In 2005 my former spouse left me. There was no money, but there was debt -- in my name. (Thank God in our short marriage we never mingled credit.)

I attempted to negotiate lower payments with the credit card companies but they told me I had to default before they would work with me. Stupidly, I contacted one of those "debt help" places and screwed myself up even further by having one larger debt go into collections.

Came to my senses and enlisted CCCS (Consumer credit counseling Services) to help me get things straightened out. Now, six months later, to the surprise of both CCCS and me, I get a letter from a law office representing said collection agency, which Chase sold the debt to just before we got my plan in place.

CCCS and I have spoken to the so-called attorney's office (Sure they are lawyers, but they are a front for the collection guys.)and they say they want $10K right now. They told us that the annual interest is 24%. They refuse to negotiate the interest rate.

My counselor at CCCS told me that I need to start considering bankruptcy filing. Currently, CCCS takes such a big chunk of my paycheck that I have no contingency to speak of. I work a second job for extra money for the rising cost of gasoline and groceries.

So, I am thinking that I will have to break into the one asset I have left -- some securities my father and mother gave me many years ago. I have already had to use them heavily to forestall any further financial "going under", and I'm down to the last small sum.

Okay, that's the background. If I want to try to settle with the collection agency/lawyer's office, will they even consider it at this point? (I know that they can find out about my small bit of securities.) If they will consider some sort of offer, any suggestions about what portion I should offer to pay, i.e. 60 percent, 50 percent, etc.?

This has just been so painful. I had a great credit rating before I married my slimbag ex...sigh! My next question will be how to figure out if I can restore my credit rating.

Thank you. Any suggestions would be helpful.