I watched your post, because debtcollector recently posted a simple, yet thorough and intelligent how-to list that I thought might pop-up again. since it hasn't yet, it's here:
https://forum.freeadvice.com/showthread.php?p=1221912#post1221912
There are some points that you make that I don't quite understand. If you were served with a Summons and Complaint, I would expect that, somewhere in the Complaint, if not in an attached Exhibit, there would be a statement of the amount being sought and the date that it accrued (what they contend is the beginning of the SOL period). That's the date that they'll ask interest calculations to start. Are you sure there's nothing? A "since" date?
The fact that this is not on any credit report is not relevant at this point. Forget it.
After you look at DC's list (and I hope that you will), I'll tell you that there's nothing magical about this negotiation process. I don't do retail work; I work business to business and the CEO or CFO is no more or less agitated than you.
Start by explaining that you'd like to settle the obligation, not litigate it. Then you're basically friends working together for a viable solution to a problem, rather than starting as adversaries.
Don't fail to file a timely response, if it gets to that point, but the lawyer knows that it will cost you something to do that. Make it clear that, with only a finite amount of funds, you'd rather give it to the creditor than to the court.
Where do the negotiations start? Again, look at DC's list and DON'T promise something you know you can't do just because the lawyer demands it. Say you'll look into the possibility of loans from family or friends but you know it's beyond your present reach, you'll call back but end the call. Ensure that you keep communications open by agreeing to a time and date to talk again, but then get away and re-evaluate.
Remember that (1) everything they must do costs them money too and (2) there is very little information that they cannot compel from you one way or another, sooner or later. So, what you can agree to do cooperatively saves everyone money and, if you are asset-shy, offer to prove it. If they want to see a recent tax return, or balance sheet, or spousal support order give it to them. Same goes for a payroll stub. REDACT (black out) business name, bank name and account number etc. etc. but cooperate to the extent necessary. In other words, don't give information that you aid enforcement if you don't strike a deal, but give enough to support your claims and justify your offer. Don't "give away the store" and don't do anything unless requested, but let them know that you're sincere. They'll get it anyway.
When you talk again, let them know that you tried but you couldn't get the loan. You're offer is the best you can do but you will do it.
As everyone has told you, get it in writing. What I would add is to "trade" a written settlement agreement for an agreement that the litigation not go forward. This is done all the time. They get your written promise on such and such terms. If you default, they get to file that document in court and get a judgment but, in the meantime, everything is suspended and, if you fulfill your promise, they dismiss the litigation without it ever going to judgment. Make that a firm part of the deal.