Creditor problem/NSF check

[MRMNC]

2 months ago i was contacted by a collection agency about a debt they had assumed from a credit card i had. They stated that I owed 2500 dollars, but were willing to settle for 1721 dollars. I thought that was great, but i didn't have the 1700, and of course not the 2500. They told me that I should try and raise the money from family and friends, of which i thought I could. They also said that they needed my account number and routing number for my checking account to hold the 1700 offer or they would rescind it. I agreed, foolishly, and gave them my information with the stipulation that if I could not raise the money, they would agree to not run my check. Well it came to two days before my payment was due, and I didn't have the money. I called this agency and told them so, which they referred me to someone else who lectured me about the impossibility of working out a deal where i could make payments. From here, their phone started cutting in and out (I was on a cell phone and I know it wasn't mine) and blamed the bad connection on me to which there was a click. In two days they proceeded to try to run the check, which obviously bounced. During this time I talked with my employer who recommended me writing a letter protesting the debt and asking for a detailed account of the debt. I didn't hear from the agency for 5 weeks, and when i did they said that they don't play games and they know that an NSF check is going to be my problem and they were going to "nail me to the wall." I wrote them a certified letter explaining everything that i've told you and also told them i never authorized them to run this check for the 1700 dollars I included an offer to work out a deal for payment in installments. My question is this: What can they do to me now? Are they going to proceed with a lawsuit because of my stupidity of giving them my routing and account numbers? What should my next action be? They say that i have until noon on monday to respond.