The way Debt Collection agencies work is they buy the debt from the original company at a lower rate and then attempt to get you to pay the whole thing (which is where they earn their money).

You've bought yourself 4 weeks by agreeing to a payment plan.

What you now need to do is put in writing your income and outgoings as well as what you can realistically afford to repay on a regular basis.

In the letter let them know that you are happy to agree to a 6 monthly review to see if you can afford to increase those payments should your situation change and you will be happy to include any lump sums should they become available (tax etc).

No company wants to see you go bankrupt purely because it means that they lose money in a big way.

Your other option is to wait until they send a sheriff (which is the next step if you ignore it) and go into a Court Ordered Payment Arrangement. Very similar to you going into a direct arrangement with the Debt Collector EXCEPT if you default, the court can order repossession of goods to the value of the debt.

PLUS - dealing with the Debt Collector, if you pay your loan for say 6 months they may offer you a reduced settlement amount in a few months time. If you and your DF are in a better position then, you may be able to afford a lump sum (personal loan, consolidation loan etc) to get rid of it for a lower cost than the original debt.

Also, ask if they have frozen the interest. They should do that if they've bought the debt - in which case even if it takes you 5 years of a payment plan, you may find that after 2 years you can offer a lump sum to completely finalise the debt.

I hope that's helped - don't stress hun - you just got a mega ***** the other day and she had no business speaking to you the way she did and threatening you with things that are not right. It'll get better mate - I promise. Money problems are evil but it does go away and with time, planning and a STRICT budget you'll be smiling back on this in a few years time