Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Bankruptcy can eliminate settlement obligations.
However, if you are not living in the U.S. filing bankruptcy can be complicated (are you still a U.S. Citizen?)
Unfortunately, this issue is a little bit complicated by the international issue, but it is not impossible.
You being a British citizen, living outside the U.S. is going to make it very difficult for your U.S. Creditors to collect from you. They will have to actually get a judgment against you in the U.S. for breach of contract (sue you on the settlement agreement, or get an entry of judgment if you stipulated to a judgment as part of your settlement (pretty common)). Then, they will have to take that U.S. Judgment to the U.K. and get it enforced as a "foreign judgment" (this is complicated enough going from one U.S. State to another, it is very difficult going from one country to another, most creditors do not bother unless the amount is very high, and odds of collection on the debt are very great).
So, you can simply ignore the issue in the U.S. unless you have other assets here in the U.S., in which case you are going to need to worry about settling the debt here.
If the creditor actually goes to the trouble of naturalizing a U.S. judgment in the U.K. you can then explore options of bankruptcy in the U.K. (which is an area of law I am not qualified to instruct you on).
While it is possible for non-U.S. citizens to take advantage of U.S. bankruptcy courts, they must be residing in the U.S. to do so.
It is always possible to renegotiate (neither side really benefits from going through litigation to force the issue).
I cannot represent you or advise you unfortunately (this forum is for "general legal information" only, and I cannot solicit or accept clients through the forum (it is one of the clauses I must agree to when acting as an expert on this site)).
You can find local attorneys using the State and local Bar Association directories, or private directories such as www.AVVO.com; www.FindLaw.com; or www.Martindale.com (I personally find www.AVVO.com to be the most user friendly).
For the amount of money you are talking about, I really don't see a creditor trying to pursue this debt overseas, it simply isn't going to be cost effective. (It is possible, just not cost effective from a cost/benefit analysis, my assumption would be that they are posturing to try to get you to pay voluntarily).