Seriously consider BR, it will put an end to your debt worries. Though do seek some professional advice if you have equity or assets you are trying to protect.
When a debt defaults, it becomes payable in full. This is normal procedure. However, on a unsecured debt, they can chase and chase but if you cant pay in full then you cant - which is also normally the case. So they will ultimately be looking for a monthly pro rata payment. In terms of court action, the creditor would apply for a CCJ and the courts will decide what you need to pay. As long as you fill in any relevant paper work that is received from the courts, and you complete a proper I&E account for them, you will only be asked to pay back what you can afford (even if its just £5 a month).
Alternatively, you can contact someone like the CCCS or Payplan and setup a DMP.
As for your original IP, I think maybe they should of known about Black Horse - and also August to January to prepare a proposal seems a long time to me. If they suggested an IVA was your best solution originally, then it would seem you were ill advised considering BH is your major creditor and there stance on IVA's. But without more details, its hard for me to comment more.
Good luck in getting something sorted, and also I wish you and your wife good health and speedy recoveries.
