What can I do to remedy the situation? Should I file a motion to set aside default? Are there any other options, considering I sought help through American Board of Physicians and through non-profit organization. None of my actions precluded collection agency from reporting me to credit bureau, suing and trying to collect despite the dispute?
Yes, you must ask the judge to vacate (cancel) the judgment against you. You must have a good reason for not going to your trial, like you were not properly served or you had a serious emergency.
You must file a motion no later than 30 days from the date the court clerk mailed you the Notice of Entry of Judgment (Form SC-130 or Form SC-200).
However, if you werenot properly served with the Plaintiff's Claim (Form SC-100), you have 180 days from the date you discovered there was a judgment against you to file a motion to vacate.
File a Notice of Motion to Vacate Judgment and Declaration (Small Claims) (Form SC-135):
The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author (who is only admitted to practice law in the State of California). For specific advice about your particular situation, consult your own attorney.
Please see my response to your other questions.
Don't waste any more time on Avvo or with your non-profits - get the judgment set aside.
Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.