How do I begin the process of debt settlement?

I already have a suit against me in my county by the law firm that purchased my debt from a clinic. The original debt was for $5000. The law firm filed suit against me for $5400. The original debt was created in 2008, the suit was filed in 2011. The law firm never garnished my wages however they did levy my accounts and I have not banked since the suit because of the threat of loosing money with no notice. They have levied a total of $1300. I have not been contacted in over a year and there have been no attempts to garnish or levy in that time either. I have built my credit back up but have the suit still listed on my credit report preventing me from getting a mortgage. I want to take steps towards settlement to resolve this. I spoke with a lawyer and they offered to correspond on my behalf for a flat fee of $700 but there is no guarantee. Should I use a lawyer or try to settle on my own? Should I send a Verification of Debt letter or a settlement letter?