Removing/Setteling Repo

[Orrickc]

So, I have a repo on my credit report that is almost 2 years old (from date of first delquient). Here are some facts:

* I still owe 10600 on the orginal 21K
* I stoped paying Sept 2009
* I signed the contract in South Dakota but now live in Arkansas
* The account is still owned by the sub-prime auto finace company
* I have disputed it and it has been verified (through the CRA's)


What can I do - I want to either settle this or dispute it off! Which SOL do I follow Arkansas or South Dakota? Is a settlement possible with a sub-prime lender? Should I try to settle first if they refuse then try to validate it with a creditor validation letter? After the SOL is up (either 5 or 6 years) they can no longer sue me - is that correct? I would like to offer them a 35% settlement to start and work up from there - but I don't have more than 50% in my savings (so that is where i must stop).

I am in a lease option with my home so I need to have this completely resloved in less than two years. My lender will work with me as long as it is paid off (and appear on credit report) or I am making payments on it.