Want to buy house, but owe Cavalry for 2007 repo

[Countingpennies]

Just so you are aware, when you are successful on settling for less, you may receive a 1099 for the difference, which will be income for tax purposes. May not happen, but creditors have been doing this a lot.

[Countingpennies]

Also, find out what the SOL is on this debt, statute of limitations for your state, not the time limit for staying on your report. If you are past or near the SOL, they may be more willing to negotiate. Also, don't mention your mortgage plans in your PFD letter, that may be interpreted as desperation and you could lose some leverage.