So, first, if the person who reached out to you is a lawyer or collection agency and not the original bank, verify that they're a REAL, licensed attorney or a real collections agency. There are a lot of scams out there from people pretending to be debt collectors, or who don't really have authority to collect a debt. Attorneys can be looked up at this link. You can look for collections agencies at this link. If they're a Corporation or LLC, they should be listed.
Next, you have a right under the Fair Debt Collection Practices Act to send them a letter requesting that they provide validation of the debt. They're required to respond within 30 days and cannot continue seeking to collect until they give you the validation. That tends to work if they've threatened to sue but have not actually filed the lawsuit yet. Here's a sample letter:
You should be aware that it's a violation of the FDCPA to threaten to send someone to jail for not paying a debt. That's one way to recognize if the person contacting you is a scam artist, not a debt collector. If they do that, take your time and do more research before agreeing to send them any money. If possible, review your copy of the original auto contract to see if it says that repossession is the bank's EXCLUSIVE remedy in the case of default. It's not common, but if it says that, they can't sue to collect the rest.
If the collector does manage to prove to your satisfaction that they purchased the debt and have a legal right to collect it, then you may want to consider negotiating with them. Debt collectors typically pay very little to purchase debts, and will often settle for far less than the total. You can seek to negotiate even after they have filed a lawsuit.
If they served you with a Summons and Complaint and a lawsuit has already been filed, then the most important thing is that you HAVE to respond. If you don't, you automatically lose. The response is called the Answer, and it typically addresses each allegation in the Complaint in order. You're allowed to call upon them to prove that they lawfully purchased the debt and that the amount of money they're asking for is legitimate. You do not have to admit any fact you do not 100% know to be true. If part of a statement is false, the entire statement can be denied. The Answer is also where you state any affirmative defenses you may have--legal reasons that you don't have to pay (inability to pay is not an affirmative defense). After your response is filed, you'll be able to request discovery from the other party, which includes proof of the original debt + proof that they bought the debt. Then there will be a trial where the judge decides if they've met their burden of proof.
It's important that you are 100% satisfied with my courtesy and professionalism. Thank you.