Without a written contract stating that you agree to pay lawyer's fees, they can't get her attorney's fees. That shouldn't be an issue. That does, however, present a problem, because it means that even if the amount you owed was less than $3,000, the amount they're claiming would still be higher - and that can keep you out of Small Claims Court.
A person cannot change an agreement unilaterally because of an argument. This happens a lot, but it's not legal. Both parties must agree to change a contract, and each must receive something in exchange for his promise to make the change. Otherwise, it's not enforceable. You can be held to the terms of the original agreement, but not changes that she decided to implement on her own.
With that in mind, think about what you originally agreed. Did you agree to pay $100 or $200 per month until it was paid? If so, that would not be a legally enforceable agreement. Under Ohio law, any agreement that cannot be completed within one year is only enforceable if it's in writing. Ohio Rev. Code, Section 1335.05
. At $200 per month, it would take longer than one year to pay back $8,000 and that means that the agreement is not valid. That is one defense that you could raise in your response to the Complaint. Alternatively, you might be able to argue that the case is premature - you're making payments and therefore have not breached the contract. That might be a reason to ask the judge to dismiss the case against you.
If she does get a judgment against you, she's not able to take your income tax return directly. What she would be able to do is put a levy on your bank account, taking any money that is in there on a specific date - she would likely try to time that to when income tax returns are usually deposited (which tends to be on Fridays). If there is money in the account when she goes in, she'll get what's there. But she can't stop your tax refund at the source for this type of debt. She might also be able to garnish up to 25% of your post-tax earnings, if she has a judgment. That may be something to consider when attempting to negotiate with her.
If you have any questions or concerns about what I've written, please reply so that I may address them. It's important to me that you are 100% satisfied with the service I provide. Otherwise, please rate my service positively so that I get credit for answering your question. Thank you.