Way Over My Head

Okay, I seem to be in deep trouble.

I live in Columbia, Missouri.

I had to drop out of college Dec 1999 for financial reasons. I owed the college $5,000, and could not reregister for college for the next semesters classes. After dropping out, I stopped recieving bills, but my mother was recieving them (even though we had explained to the college dozens of times that my mother was not responsible for the bills [my grandfather who was, died, and due to contestment of his Will...his accounts were frozen...and still are]). In May 2000 my mother talked on the phone with the college to explain again that she was (and is) disabled, lives on a VERY limited income and could not play the bill, also that even though I was working full time, my studio (so called "efficiancy") was approximately half of my monthly rent (Income: $810/mo. Rent $390/mo.). After talking with them, evidently the college told my mother that they were going to send my account to a collection agency...

This information did not get to me due to my mother's lapsing memory (even though she wrote it down--and just retrieved it this past week) it had evaded her memory to tell me.

...I have not recieved ONE item of mail form this collection agency, nor was I aware that my account was with a collection agency.

Out of the blue on Feb. 15, 2001, I recieved a phone call from a very uncooperative agent at the collection agency. I tried to work out something, but the agent just kept saying that nothing but $500 would "hold my account until the end of the month". Well, my paycheck isn't even going to be for that much. And because of my living expences, I live pay check to pay check (unfortunately).

This agent then explained that if I don't pay either $500 right now (and $50/mo. after that); or pay $100/mo. w/verifiable checking account & do automatic deduction to garauntee payment (and this...accourding to the agent HAD to be an automatic payment through a bank...and well, due to my massive amount of financial trouble, I cannot open an account without $300...and I don't have that kind of money either); that they would start the prosecution process.

Well...I own nothing, no property, car, nothing. I barely make enought to live on.

What are my options?

I swear that I have never recieved any mail from this agency, nor was I aware this situation existed (I knew I owed the college, but I didn't know about the collection agency)...I never recieved any phone call prior to this (On Feb. 15, 2001)...can they do this on such a short notice without legel verification that I recieved any mail (i.e. "signed for" certified mail)? It seems EXTREMELY unfair. (I know life isn't fair though...this is just mindblowing for me.)

If this does go to court (whatever...I don't understand the process) what is the worse case senario? (I don't own ANYTHING except the cloths on my back...I don't even sleep on a real bed...its a matress on the floor. [Just trying to make a point...but true.])

Please help, anything you can tell me would be very helpful.
Thank You.