payday loan now in collection

I filled out information on possibly getting a payday loa thru money mutual. The next day mass street lending deposited 300.00 into my account. _I realized this right before the first payment was due. I let them take out 3 payments. I closed my bank act and sent them a email stating it is illegal for them to provide a loan to me in. Iowa per the state laws. I offered to pay the remaining 30 dollars. They sent me to a collector call egs who threated my mother that I would be put in jail until my court date. I called them .should I set up a payment plan with them or let it go to court which they say it will cost me more than the 80 they want now