Aspire Visa Midland Funding LLC Shady business practices San Diego, California

In 2006 I got an Aspire Visa card. It had a $300 limit and $250 of that was taken as a deposit. So, after I spent the $50, I was maxed out. I lost my job and fell behind on payments. The bill ended up being over $600! Aspire called me the end of 2006 and said that if I promised to pay $20 a week they would stop adding late fees and interest charges. I agreed and sent in a money order for $20 the next week. I got the new statement in the mail and they had added so much in interest and late fees that the $20 payment didn't even make a dent!!!

I have always been told that once one of the parties backs out on their end of the deal, the deal is no longer valid. In this case, since Aspire didn't do what they said they would, I no longer owe the bill. Is this true? 

Now it has been turned over to Midland Funding LLC and they are harassing even though I have told then what went on. All they keep telling me is that was what went on between me and Aspire, not them so I still owe them. What do I do?