I agree with OwnIt 100%. I would follow the suggestions of the loan lady. Do not do what your friend or your father stated because you will end up paying more than is necessary. The debts are bargaining chips only to be brought out during negotiation of the payout price.

Try to keep things neutral and calm. The less you come out swinging the better your chances are of getting what you want or darn near close to what you want.

Sit quietly, the answers will reveal themselves when you least expect them to.
The past is gone, the present is a gift and you need to focus on today, allow the future to reveal itself when it is ready.