I'm in the same exact boat as you, except not 400K but 150K.  I'm taking the debt settlement approach to this situation.  Most of the time you can get to settle your debt for 75% of your total balance, and before completing the debt settlement process you can ask the creditor to remove the default info from your credit report.  Even if they don't you can repair your credit, regardless of the legitimacy of the Debt.  I wrote a book about it...LOL.

Read my blog it'll give you allot more information on this subject.  All I know is that bankruptcy is NOT a good option, because it sticks with you for 7 years, when debt settlement process can be over with in 3 years tops (depending on how much money you have, and how fast you can settle everything).

And you will still have your credit to be able to build on.

George Grimes.