$12,000 of money owing plus the interest & other fees on that - yes, I think you should use what you`ve got elsewhere to pay them/it off.
Its such a drag to see that money dissapear, but reality is you dont really have it anyway.
When I was a student my gran gave me some $ for something in particular which I knew I was not going to end up doing for a number of years (if ever), so I used the money to pay off my student loan. It sucked to see the money go, but was also great to know that I was even stevens with my money and did not have any, but did not owe anymore either.

Well done on deciding to get serious about finances and being active towards it.
This past week (all the talk of inevitable recession I suppose ) I have decided we really need to get more $ savvy and make specific cutbacks. I have never had a set grocery budget for example, but now I am going to work one out and stick to it.