I just trying to estimate how long it will take the the heaving to settle once I repair the leaks so I can start rehabing the house.   

Conversely, if one side of the house sits on unconsolidated fill or on silt, it would settle or shift over time - once again, causing cracking.

. - BUT, it also appears old and probably a symptom of the original house settling.

(2) Should we expect to settle for the full amount of the court ordered debt plus court ordered interest?

In 30+ years we've been sued 1x (legal blackmail over a tenant's drunken trip/fall) which the insurance company settled for $1,500.00).We've been using some privacy tactics to keep our names off the county recorder and the target off our backs.Further, we review our insurance coverage and premium annually, just to keep on top of any changes.As with all insurance, it seems to be a waste of money... until you NEED it!

This meant I couldn’t pursue the driver personally and had to rely on their car insurance, which settled for $25K—their maximum coverage.Unfortunately, the crash added $77K in unexpected costs, including $41K in repairs and extended holding costs.

Quote from @Pippa Stewart: Might have a hit on credit a bit (not as much as foreclosure), and it will show it settled for less on the property..

Now that the housing market is slowly settling, should I sell and get out the equity I have?

I've been involved in a lawsuit that settled right at a million dollars, and that was over 20 years ago.

The seller not necessarily settled, Seller simply took the only offer they had.