Illegal payday lender now in collection

Okay. What is the name of the payday loan company? Are they legal or illegal? If the loan is illegal, then there is no need to care about the installment loan agreement and promissory note. They can't do anything.

Thank you for your response, just a couple questions about my next steps...Do I need to send them documentation? How do I keep them from reporting negatively to the credit bureau?

Usually, payday loans get reported in the credit reports when they go to the collection agencies, which usually happens with legal payday loans. But you're talking about illegal payday loans.
Last year TransUnion was sued due to violating federal law of including void and uncollectible payday loans on credit reports. So, don't worry about it.
Keep checking your credit reports and if you find such listing, take the necessary steps.

If the payday lender is illegal, you don't need to worry. Just pay off the principal amount. Don't pay any interest for your pdls.

If the lenders are no legal, then you are just liable to repay the principal amount, not the interest.

This is a recurrent problem. Collection agencies can report to credit bureaus once loans are assigned/sold to them. Plain green and Cash Call have the same problem. Plain Green is a tribal lender and when people stop making payments, they assign the accounts to Cash Call. Now, Cash Call reports the accounts to collection agencies and trouble begins.

Do one thing. Dispute the listing with credit bureau and get it removed.