Get it in writing! Look up at the top of this board (or at the top of General Credit) and click on Frequently Requested Threads. There are several threads in there about PFD's, with a bunch of sample letters.
For this one, since you acknowledge that it was your debt, don't use one of the grumpy ones. I would take one of the sample letters and add something to the effect that you appreciate their offer to settle for half, but in fact that you'd rather pay it in full, if and only if they will agree in writing, on company letterhead, to cease reporting the derogatory information afterwards. (I think I might have blended two of your baddies here, but the same idea applies.)
General Credit Issues is full of discussions about PFD's, although it's a bit of a madhouse these days.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007