Space Cowgirl is right, I believe, though I personally think that most of these places that advertise to negotiate a settlement for you are wastes of money, because the service they provide can easily be done by the consumer himself. The only benefit is that they do have the power to negotiate lower settlements than normal (without a debtor on the line to put the pressure on most clients I've dealt with will adopt a "take what you can get within reason" attitude toward these organizations), but I question how much of a benefit that really is, in the end, since you'll end up paying the fees for their services. I really just don't know what they typically charge. And some of them are just scams. I'd be wary at any rate. Freedom Debt Relief and Care One, both of which I've heard or seen advertised and dealt with extensively at work, seem to be reliable and reputable, if you're afraid you won't be able to do it on your own or just don't want to go to the trouble.
Six months seems to be a normal amount of time to allow a debt to go unpaid before charging it off. I think I've seen it even shorter than that. Once it's charged off you'll almost certainly be able to pay less than what you owe. If you're being contacted by a collection agency about the debt, it's been charged off.
A debt collector will almost always ask for the balance in full, but will almost never press for it. How much of a discount you can get depends on the client's (ie the debt owner's) guidelines but keep in mind that he's not really expecting the full balance, so he'll begin the settlement negotiations with a higher percentage of the balance; you can usually go lower. If he starts at 80, he'll usually go down to 60 or maybe 50. If he starts at 60 shoot for 40. There's always a blanket amount that can be accepted, and the collector can usually even accept less than that, as long as the client approves it. Again it comes down to taking what you can get from some people. In the end it all reads the same on your credit; no matter how much you settle for it will be reflected as a settlement, unless the creditor has a special program where paying can clear the debt off the credit. But that is rare and should not be expected. And generally older debt can be negotiated lower than newer debt; if it's about to fall off the statute of limitations expect 25% or lower to not be out of the question. By this point you've essentially been labeled as uncollectable, and again, the attitude is take what you can get.
Of course different types of debt are treated differently. I can say with confidence that what I say above applies to credit card debt because that's mostly what I have dealt with. I've never collected medical debt so I can't say with certainty that it's as easy to settle as credit card debt but I'd be surprised if it wasn't, and given the fact that it doesn't have the same effect on your credit I'd imagine it's easier. Student loans are treated very differently from credit card debt but I'm not sure how that affects one's ability to negotiate a settlement (I believe it is more difficult). Real estate debt is treated similarly to credit card debt with a few wrinkles thrown in; for example if the debt is settled by means of a short sale, 5% is a normal accepted amount for a second mortgage. And Bob's your uncle.