" I am being told by Northern Credit that the amount I can pay is unacceptable. "
This is really the issue. You say the amount should be acceptable, they say it is not. As the person who owes the money and has already defaulted on the initial agreement, you are not in a position to dictate the terms of repayment. Sure, it would be nice if everyone would go along with your plans and live happily ever after, but that rarely happens.
" they are just out to take a person to court and make it even harder for them to pay the debt "
On the contrary. It would be stupid for them to make it more difficult to collect their money.
The bottom line is that this company thinks it can get the money it is owed more quickly by obtaining a judgement, then possibly attaching bank accounts and paychecks. Are they wrong?