Honestly, if you can't afford to pay it back, call a debt counseling company. They can negotiate on your behalf. I don't think this aggressive debt collector can do much at this point, they may successfully get wages garnished. Which will also be a settlement.

If the amount is "smallish", they could try small claims. You could argue for a settlement there.

Bankruptcy is a wonderful option when you need it. It is life-changing, in fact (for the better).

If you do go bankrupt, you can always grab yourself a KOHO account so you don't have credit card envy. Even though it's not credit, you can still buy online, pay for parking etc..

What you need to know is YOU (not metaphorically) can buy millions of "bad debt" for like $50k. You can then harass people and try to get them to pay. Since they now owe you (the purchaser of bad debt) money. There is a whole business model around this, popular in the get rich quick circles.

This wreaks of it, I'm guessing they are bluffing. But a credit counselor will know what to do.