Okay, let me start by explaining briefly how this came about. In 2006, I had a near-perfect credit score of 820. Then…I graduated college, got married, moved, and in the process racked up a lot of credit card debt, which I steadily payed off for more than a year, until both my husband and I lost our incomes. He managed to find a much lower paying job that left us no money for anything beyond basic necessities, and sometimes, not even that.

For 3 years we stayed in this living pay-check-to-paycheck funk, and now he has a job that allots us about 0 extra a month. I would like to start applying this to some of the old debt, so that we can rebuild our credit, and try to get out of this area where I’ve been unable to find work for over 4 years.

I had 5 delinquent credit cards. I settled the two highest already. I had a delinquent car payment, which has been paid off in full. Now I am trying to determine, what to do about the other 3 cards. The statute of limitations in Oklahoma is 3 years, and I am well past that. I have been contacted by 2 of the 3 creditors and offered settlement plans.

My questions are, at this point:
Is it better to settle, or to wait the additional 2 years for it to fall off of my credit report completely, since after 7 years they can no longer report it?

Will a settled debt look bad on the credit report?

How long will a settled debt stay on the credit report?

Will I have to pay taxes on the unpaid portion of the debt?

Do creditors have a way that they can report the debt where it appears on the credit report as paid in full rather than settled, and if so, should I try to negotiate for something like that?

Any information would be greatly appreciated.