Legal Question in Credit and Debt Law in California

Yes. Your first mistake was responding to the lawsuit without consulting a lawyer. Don't make that mistake again. Consult a bankruptcy lawyer in person.

You may or may not be able to file for bankruptcy. You have to be actually bankrupt, basically meaning you can't pay your debts, not you can't pay your debts unless you sell your Mercedes or stop eating out at Michelin three-star restaurants every night. In other words there must be no realistic way for you to pay your debts, not that it would just be a hardship to pay them. If that is the case, then bankruptcy would probably be a very good idea, and if you get it filed AND notice of the filing sent to the collection agency and the court they are suing you in, it will automatically stop all activity in the collection case.