From a layman's point of view, since it's a charge-off, might as well offer a settled amount rather than pay them the entire amount if it'll just end up the same on your credit either way. However I'd ask if you could make the payments as scheduled from now on if they change it from a charge-off back to a current account, and report all future payments as they are made... since that would likely be best for your credit.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states