need advice/thoughts/input please!

i have an account with Choice (CITI) that i tried unsuccessfully to work out some sort of payment plan with since January. however, since a portion of the balance was on a low interest program, they could not (or would not) do anything to work with me despite calling in a couple times a month. Then in june i started getting calls from UCB and then received a letter regarding the account. i sent them a debt validation letter and although i KNOW it was received (return receipt) they never responded. instead about 3 weeks later i received copies of about the last 10 billing statements from the account from CITI. Then i heard nothing for several weeks. when i next called CITI to see if there was yet any payment plan i could work out, i was told that there was a "cease and desist" on this account and so until i sent them a request to remove it, they could not talk to me. i sent the request to remove it, and called back a couple days later (which is what the person i spoke to advised - that i had to wait 3 days after sending it). so i called back and was told that the day before it had been sent to a law firm (Margolis, Pritzker, Epstein and Blatt) and i would need to contact them. so i called them and was offered 2 settlement options, neither of which i could afford. the person i spoke to there said that i could send in proof of income, letter with monthly expenses and what i could afford - in essence make an offer, and they would review and present it to CITI and let me know. so i did that and made my offer, and faxed everything over to him. i called the next day and confirmed that he had received it - he advised that he was reviewing it with his manager and should have an answer for me the next week and would call me. didn't hear anything that next week, or the next or the next. i figured the ball is in their court, and i'd wait to hear - it's not as if i won the lottery and could make any better arrangements! so he called yesterday and i finally spoke to him today. CITI has turned down my offer, and basically gave me the same 2 options (65% with payments over a year or the full balance with payments over 3 years - neither of which i can afford). i told him that he has seen my financial info and obviously i still cannot afford either of those - why can't CITI see that??? he said that i could send in what i can afford monthly (to the law firm, but with checks made to CITi with my file number on them) to at least work on paying down the balance and that will buy me some time to see if i can afford one of the two offered settlement options sometime in the future. he also advised me to call and check in monthly. however, he also said that once it went to court they would review my financial information again and at that time they could look at extended payment plans. i asked why they couldn't look at extended payment plans now as they had my financial info right there. and also asked what the benefit was to send payments in if it was going to go to court anyhow - wouldn't i need those funds to be able to put towards court costs and any extended payment plans? and also, i asked if by doing that it would either stop it for a period of time or slow the process at all. he was not really clear, but did advise that by doing that and calling in monthly it would probably be 6 months or more before it would go the court route. i repeated, just to clarify, that what he was saying was that if i sent what i could afford as payments now, and called in monthly, that it would allow me at least 6 months or more of time to see if i can be able to deal with one of the other offers (i didn't ask if i could then make another offer in a couple months.... )

so after that LONG story (thanks for bearing with me!) i'm wondering if anyone has advice as to how i should proceed. i don't mind sending in something towards the account if it will be overall a good thing and truly buy me some time, but i also just don't want to make a wrong decision. this is the LAST one i have to deal with and it's been the hardest/worst. i just want this stress to be OVER with!

please advise with any thoughts/advice/input you may have!

thanks so much!