Difference between installment loans and payday loans and laws for each

I live in Arizona and took out a loan through ThinkCash in August of 2010. I made a total of 5 payments but then my wife lost her job and we were no longer able to make the payments. I am now being contacted by National Credit Adjusters stating that I owe over $1000. The original loan was for $500. My wife was was just told today after speaking with a rep that we have 48 hours to give them an answer as to whether I can agree to 6 payments of $173.28 with the first payment due March 31st. I have checked and National Credit Adjusters is licensed to collect in AZ however, I can not find any information as to whether or not ThinkCash is/was licensed in Aug. of 2010. Also, the collection agency faxed my place of work an employment verification form today but they did not fill it out and actually gave me the form thinking it was a scam. The rep told my wife that if we do not call back within the 48 hours then she will have no choice but to forward the file onto their legal department. We have received nothing in writing from this company but they insist a letter was just mailed out on March 3rd. At this time, what are our options and how do you recommend we proceed?