Without seeing the postcard, I can't be 100% positive, but I can guess what happened.
A default means that you didn't answer the complaint, not that you didn't make a payment as agreed. In Cook County, the computer system automatically sends out status postcards at certain intervals. Since you negotiated payments with the law firm, you probably didn't answer the complaint - hence the status postcard indicating a default.
I assume you have proof of this negotiation in writing. Of course, you should continue to make your payments as agreed. And if there's a court date, you should appear. You should also request that the attorney make sure that a judgment is not entered against you. He or she should set the case over for a status to ensure that you pay in full, and then dismiss the case once all payments have cleared. Otherwise, a default judgment may be entered against you. I don't think there's anything fishy; it's just that in a high-volume collections practice, sometimes things just slip through the cracks.
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