The debt collector's statements are empty threats used to frighten you into making a payment you cannot afford. Although many of the statements the collector made are possible violations of federal law (the Fair Debt Collection Practices Act), many collectors are willing to bend or break the law if they think it will increase their collections. These scare tactics work, which is why some collectors use them.
Thankfully, you are not required to subject yourself to harassment by unscrupulous debt collectors. Under federal law, collectors are required to stop calling you if you notify them in writing not to cease communications. Collectors are also not allowed to make threats of legal action if they cannot or do not intend to actually sue you.
If you feel that this collector violated your rights under the FDCPA, I strongly encourage you to consult with a consumer rights attorney in your area to discuss possibly filing a lawsuit against the collection agency; not only could a lawsuit result in your debt being canceled, but you could be awarded damages. You can locate an experienced consumer rights attorney in your area by visiting www.naca.net. To learn more about your rights under the FDCPA, I encourage you to visit the Federal Trade Commission's Fair Debt Collections Practices Act FAQ.
A creditor can file legal action against you to collect on an unpaid debt, and if the court awards a judgment in the creditorÂ’s favor, the creditor may be able to garnish your wages, levy your bank accounts, or take other action against you to enforce the debt. However, the legal process involved in obtaining a judgment is time consuming and expensive, which is why the vast majority of debtors are never sued for their unpaid accounts.
Here, even if the creditor did decide to file a lawsuit against you on this account, it is not something that would happen overnight, and certainly not something that could result in a wage garnishment as quickly as this debt collector described. Also, court costs and legal fees can be added to a debt if the creditor files suit, but these fees are not going to add up to "thousands of dollars" on a $2,600 debt; they probably would be no more than a few hundred dollars.
As you can see, this debt collector was trying to strong-arm you into making this settlement payment. I agree that you should not make any settlement payment without first obtaining a written agreement outlining the terms from the collector. In your case, the best course of action may be to send the collector a cease communications demand, try to save some money, and when you have accumulated a small fund, contact the creditor and make an offer of settlement. Hopefully, the creditor will be willing to compromise and you can resolve the debt with a significant savings. To learn more about negotiating with your creditors, you can visit the Bills.com Debt Negotiation page.
I wish you the best of luck in resolving this debt, and I hope that the information I have provided helps you Find. Learn. Save.