Honey, according to the Federal Fair Credit Act, they have to take as payment, what you are able to pay. And yes, if you don't pay something, they can go to court, get a judgment and then ask for garnishment, which can be up to 1/4 of your paycheck. Offer them a monthly payment, say this is all you can pay, and if they refuse again, tell them to put it in writing. I believe if you have offered payment and it has been refused, the debt may be cleared. All collection agencies specialize in scaring the crap out of people by telling them they will ruin your credit - true; garnish your paycheck - difficult but true; and generally make life miserable for you. You do have rights, fight back. Tell them they cannot call you at home except between the hours of ? and ? and under no circumstances can they contact you at work, or contact your work place.
I owed a local hospital over $300 for hospital bills not covered by my insurance. I live on Social Security which cannot be garnished. I told them how much I would pay them a month ($10) and they blew a gasket and told me that was unacceptable. I then told them I would pay them $5 a month until they shut up and left me alone. I proceeded to do just that for 3 months, and they came back to me and said, Okay, if $10 is all you can pay, just don't miss a payment. LOL
P.S., I also told them to collect from some of the Mexicans who have babies there free of charge. I know of one couple, illegal immigrants, who have had 3 children born in the U.S., at that hospital, and never paid a dime for any of the kids.
P.P.S. Make sure every contact you have with these people is in writing. Never tell them something over the phone.