Your initial advice, that hiring someone will cost more than a settlement is often untrue.
Often times debt collection cases like this are purchased without documents to back up owership of the debt at all and when/if they "get a live one" like you on the hook, they fight harder, since they think they can collect something. They may buy the debt for as little as 1 or 2 pennies on the dollar. I recently settled one for someone at 20 cents on the dollar, but folks can do much better.
It is not unheard of for these folks to just dismiss the case if an atty shows up. While these are not promises and I do not know ANY of your facts, I would strongly consider talking to someone who handles these matters, found here;
I agree with Attorney Kaufman. You should look at the lawsuit you were served with to see if the suit shows custody of title - meaning the assignments, etc that show the person suing you is in fact legally allowed to collect the debt. Depending on the amount of the lawsuit you may want to consult with another attorney. Also, consider calling your local legal aid office to see if they will help you pro-bono. If you do end up signing something with their attorneys make sure you read EVERYTHING. Any terms in the document that you sign will trump whatever they tell you. I've seen some collection lawyers say "X" and then the agreement say "Y". Good Luck!
I am an attorney licensed to practice law in Ohio and some Federal Courts throughout the United States. I am not answering your question to solicit you as a client and there is a good chance that I am not licensed to practice law in the state that you reside. I hope that you find my assistance beneficial and, at most, use my advise as a finger pointing in the right direction. An attorney client relationship is not established by posting back and forth online. One of the most beneficial aspects of working with an attorney is the attorney client privilege which does not exist when you post personal facts online to faceless strangers. Hire an attorney if you want specific legal advise. If you cannot afford one, call your local bar association or search "(your city) legal aid" online. The fact that you took the time to post your question online likely means that you could use the aid of an attorney. Call around your area and see if any local attorneys offer free consultations.
you can always settle. Hire a lawyer to evaluate your case and deal with the discovery and settlement. Understand that if you do not timely respond to discovery they will file motions to deem requests for admissions admitted and compel other responses while seeking an award of monetary sanctions.
If you settle you need to memorialize the agreement with a written stipulation for entry of judgment upon default in payments and they need to file a notice of conditional settlement with the court.