Letters and phone calls threatening to sue might be considered harassment. Excessive phone calls can also be considered harrassment. Start off by sending them a "Cease and Desist all Phone Calls" letter and state your phone number. The the calls continue, give then and second, third and even fourth notice to "Cease and Desist all calls. This will help you gain proof they they are harassing you. Send your letters certified or get a proof of mailing (about $1.00). I belive it is against the law for them to claim you owe money when you do not, it might be a felony in some states, so have them validate the debt. Send a letter saying you only want to communicate via ground mail and that you want them to validate the debt. This will buy you time in most cases. Some Collection agencies send out mass mail and they might not even have a right to collect on your debt. You can tell them that if they continue to bother you via phone, you will contact the FTC. I believe you also have a right to ask a caller/Collector there first and last name, if they refuse to say, tell them you want to know who is calling because it is your right to know and that way you can report them to the FTC, Police etc, if they are violating the law. Once you give notice for them not to call, they are breaking the law if they do so. So keep your notices for them not to call, the first, second, third one, etc.
If they sue you, file for bankruptct !!! There are online companies that offer credit counseling, this is required before you file for bankruptcy. I found one for $100.00
If they sue, look up the attorney name on your State Bar Association website. They offer a search option to look up Attorneys licensed to practice law in your state. Verify that person has a license to practice law in your state but the other tips should prevent this. Especially if you tell them to validate the debt and they fail to. If they sue and you do not owe the debt speciafically to them, they are very likely violating the law and it might be considered a felony, so have them validate the debt first.
Good Luck to all and protect yourself with these tips!!