LoanPoint USA/Consolidated advice needed

A couple weeks ago, I was contacted by a company calling themselves Consolidated, claiming to be a mediation company and that I owed their client money for a payday loan I took out in 2007. Now, I admit that I had taken out a couple loans at that time, and they did name the bank with whom I had a checking account with back in those days. The excessive fees forced me to cancel my payroll's direct deposit and eventually the account was closed by the bank. At the time, I had a simple choice, pay for rent and food, or pay them. Over time, I honestly forgot about it, given that I had other, more pressing concerns. When called, they threatened to file charges of check fraud against me unless I settled.

I admit that I panicked a little and bought into their obvious scare tactics. I haven't lived in the state where I took the loans(New Hampshire, though I currently live in Massachusetts) in over two years, and I have no way of getting up there if it was taken to court, thus risking a failure to appear bench warrant. On top of that, I've been unemployed for almost 3 years. So I tried to work something out with them. I did ask for documentation proving that I did indeed owe them money. I was told that I wouldn't receive any until the loan was paid in full and that the loan company refused to deal with me directly. In retrospect, that should've been a red flag.

They offered a biweekly payment plan using a prepaid debit card, and I admit that I jumped on it. I spent about two weeks trying to borrow the money from friends and family, periodically calling "Consolidated", trying to get an extension. Yesterday, I finally wised up and asked them the name of the loan company. LoanPoint USA.

I did some research and found out about their shady business practices. I called them up today and told them that unless they provided written documentation proving that I did indeed owe them money, I wouldn't pay. Not five minutes after speaking with a phone rep, I received a call from their legal department, threatening to take me to court, as well as sending a process server to my residence.

Now, I have done further research and found out a couple interesting things. For starters, LoanPoint USA isn't licensed in the state of New Hampshire, nor are any of their cover names. On top of that, when I did do business with them back in 2007, they continually debited rollover fees from my checking account, fees that did not go towards repaying the principle balance of the loan, a practice that is illegal in New Hampshire.

I'm fairly certain that I am safe on a legal front, but at the same time, I am concerned that since I tacitly admitted over the phone that I owed money, they may indeed pursue this in the courts. Like I said, this came completely out of the blue, I did have a loan with them in the past, and I panicked due to my current situation. I have more pressing, legit debts, and since I'm unemployed, living off food stamps, and sleeping on a friend's couch, it's like getting blood from a stone, to use an old cliche.

Any advice or input? I'm losing sleep over this as well as working on an ulcer.