It sounds like that is an excellent offer if you can come up with the money to settle. Keep in mind a couple of things however:
1. Do NOT send them any money without a written agreement spelling out the terms of the settlement in your hands first. The agreement should clearly state that the debt will be settled in full and that no further payment will be due.
2. See a tax advisor right away to see if you will be able to avoid paying taxes on the settled amount. You don't say how much debt you owe, but if more than $600 is forgiven, the creditor must file a 1099 with the IRS. The IRS treats forgiven debt as income. But you may be able to avoid that tax liability if you can demonstrate you are "insolvent" (by IRS definitions) at the time you settle. Don't wait until next spring to deal with this.
Finally, I'll add that if you have other significant debts that you will not be able to pay, then settling this debt may not be the best choice. Instead, you may want to consult a bankruptcy attorney.
Good luck. Please do us a favor and come back to tell us how it goes.
