Interest

I got a judgement against me last year, once that happened I worked out payment arrangements with the collection company. My original bill was $500 and once they got the judgment my bill was $2200 which is crazy but I just wanted to make the payments and get it over with. I first made a $500 payment and then I was supposed to pay $130 a month until it was paid off, I made $160 payments most of the time ($30 more then what I was supposed to pay) and then I lost my job and was only able to pay $60 a month for three months, by then my balance was only $278. I called today to get the balance so that I could just pay the rest off, by my records my balance is $98.00. So I called and said "I would like to get my final balance so that I can just pay it off" the gentleman said "I can take $1,000 if you pay it today". I thought he was joking. I explained to him what my records were and he was very nice, he looked through my payments and he said "your right, I see where you paid more then your minimum payment almost every month and then you only paid $60 there at the end" and then he told me that what happened was since I didnt make the full payments they re-added on the interest totaling $1300.00 I am on the verge of a breakdown. I tried so hard to get this bill paid off and put behind me, on the months where I only paid $60 I always contacted them. Is it legal for them to re-add the interest when I only had less then $100 to pay? I live in the state of Colorado. Thank you so much