Are Firstsource Advantage practices a violation of my credit rights?

I received a letter from Firstsource Advantage LLC on 3-9-09 stating I owed an amount slightly in excess of 2000 on an account that had been placed with them. I called to get explanation, they told me it was on an account which I had owned with Dell from about 6 years ago. I told them I did agree the account was mine, but the amount owed did not sound correct, and I would like verification. They told me to send a letter requesting this, and I did so. This was all done within 10 days of receiving the initial letter. I also asked if they would extend the deadline (3-21-09) for the settlement payment amount until this was resolved, and they agreed to do so. I sent letter certified, so after I received delivery receipt I promptly called Firstsource to find out what the status was on my dispute (bear in mind, this all happened before the end of March). I was informed they had transfered the information to Dell to request my information, and they would call me once they had received a response from Dell. In the meantime, I went out and applied and received a loan to pay off this debt. Then, when I still had not heard anything back, I called Firstsource again. They informed me they had transferred my account to legal status on 3-24-09 in response to a cease and desist I had sent (which is not what I sent!). I argued with them, stating all the facts I just laid out, to which the manager said "You know, I think you're just afraid to get sued so now you're trying to blame this on us". So basically, I called Dell, who said the account was now with a different company. 3 COMPANIES LATER I find out its with a lawyer "Mapother & Mapother", whom I finally was able to contact today and they said if I do not pay them 1800 by Thursday they will sue me and garnish my wages. This is close to 1000 more than the settlement amount I was originally offered and is outside my realm of possibility as far as payoffs go. I don't want to have my wages garnished and go through all a legal mess, but I really feel like I'm being screwed here! Was Firstsource within their rights to do all this without so much as a phone call or a letter to let me know they were suing me? Especially since I had contacted them immediately upon receiving the first letter and informed them of my intent to take care of this matter? I need help! I don't know who to contact first or really what to say, and I don't want to make an *** of myself, but I want to get this taken care of!