Credit crisis! Can you help?

'Aloha! My fiance and I are desparately trying to repair his credit. when he was 18 he recieved the poormans holy grail (capitol one card)! This was almost 5 years ago. It had a $300. He lost his short unstable job and learned shortly after, we had an unexpected surprize on the way and he couldn't pay his tiny debt. He tried to pay them about 3 years ago, but couldn't continue to pay it (by that time they were asking $1100!). Things are looking up financially for us and we want to get married and hope to buy a home (after the market clears up!) and it's still hang'n around his report as a charged off! We really want to repair his credit and have been working very hard to do so. However, not only does it show up once with credit bureaus, but now it shows up twice as a collection because they sold it to, get this, yet another credit agency! So that is 2 accounts dinging his credit for the same thing! Can they do that? They are demanding $850 to satisfy the account probably doesn't sound like much, but a 300 dollar account (witch less then $100 was used) that seems steap. There should be a cap on that. I feel bad for him because he was so young and didn''t have the faintest idea how it was going to effect him later. I do feel though, that it is our financial obligation to pay, but how much is to much? And collecting twice without so much as a letter? :cry: What on earth to do and where to start.... Any advice would be wonderful. Mahalo!