Settlement with a collection agency

Have you gone to court yet? If you haven't, it's definitely worth a shot. Even if a court date has been set, they still may be willing to make some arrangements.

nope haven't gone to court yet. hearing hasn't even been set. what kind of paperwork do i need from them to make sure a)case is withdrawn and b) debt is paid to the right party and is settled once and for all?

You will need a settlement agreement. Then a zero balance letter stating the account has been settled in full. These letters are not automatically generated and you will need to request both of them. To get a zero balance letter quicker I suggest sending in a cashiers check, money order or shell out for a western union.