Yes, if you have a bad debt reported to your credit listing and unpaid balance this hurts both your credit rating along with your balance between debt-to-income if you had been considering purchasing...
it will go up by 10 to 50 points depending on the amount owned and cancelled.You can further improve it by continuing to use the credit card, and paying the balance in time.
You didn't really explain what you mean by "all debts".
Paying down (or off) your revolving debt CAN cause your credit scores to increase. Paying off bad debts, like collections and charge offs...