ARA Threatened to sue me Villa Park, Illinois

I got a letter from ARA. stating thatI owe them $1,1051.40 and they would settle for $805.98,also saying that they would accept $50/monthly payments.Then whenI called them they were saying thatI had to settle the payments with him right at that moment whenI was talking with him on the phone. When i was talking with himon the phone he was saying thatI could be charged with legal fees for not paying rightaway, and my balance would be $5,000 total.Then he said that he would settle for $500 at first then chaned it up and went with$400. AsI explained to him thatI won't be able to make a payment today, he argued with me about my other finances then he brought up my loans thatI got from a loan company and suggested thatI get another from another loan company to make the payments.