Pull a credit report and make sure that this is the only significant debt showing up on your credit. If not, then you should consider bankruptcy, since it will probably cost you less to deal with all of your debts in a bankruptcy than it would just to settle this one debt. On the other hand, if this is your only debt, bankruptcy doesn't really make sense. Normally, the collection attorney gets paid on a contingency fee based on how much the attorney collects. Therefore, if the creditor gets paid sooner, then the attorney gets paid sooner. If you have a lump sum that is perhaps somewhere between 50-75% of the balance owed, the creditor might accept it to payoff the judgment in full, especially if a bankruptcy attorney were to tell you that you could file a bankruptcy and wipe out the judgment. That might increase your negotiating leverage. Although bad credit items can stay on your credit for seven years, your credit normally improves significantly by about two years after paying off the bad debt, so if you deal with it now, your credit should look a lot better when you are ready to buy a house.
It won't cost you anything to make the offer, and I might start at a lower amount than you are proposing to give yourself some wiggle room to sweeten your offer. My esteemed colleague, Charles Smith, of Ohio, has written a great article on settling debts & I am posting the link below. Hope this perspective helps!
You should definitely try to settle the debt. You have nothing to lose in making an offer. Find out what the balance due is after your last payment and then base your offer on that number. Wait to make an offer until you are able to pay it in a lump sum immediately. In other words, don't make an offer that you can't pay until next week or next month. Creditors are often more willing to settle between the 20th and 25th of the month so time your offer accordingly. Also, you'll need to explain to them a hardship as to why they should help you (for example maybe you've had employment troubles, lost hours at work, had to take a lower paying job, sickness, etc.) Offer to pay off say 25% of the remainder in a lump sum and see what they say. If they want 80%, offer 30%, etc. until you both agree. Never ever give them your best or highest offer up front because they always want more. Start low. Go for getting this monkey off your back so you can move forward with your life and buy that house in the future.
One last caveat, if you do have other debt than this, then seriously consider meeting with a bankruptcy attorney first because your money may well be better spent in dealing with all your debt than with just one creditor.
The above information does not establish an attorney-client relationship and is based upon the limited information the questioner provided. Unless you have signed a representation letter and paid a retainer, you are not a client of the firm. You should seek legal advice from an attorney in your area if you want a full legal opinion in this matter.