They have the legal right to sue you;if they obtain a judgment they cannot get an attachment of your disability payments,but can on other cash assets. Discuss with the bank how you can protect disabilty money from attachment.Also I suggest you look at the website DefeatPresslerandPressler which is about a NJ collection firm and the tactics they use which are often in violation of the fair debt collection act. Many companies outside of NJ use these same tactics.
You might find my legal guide on selecting and hiring a lawyer helpful.
You might find my legal guide on Is it Legal? Is it Illegal? helpful.
You might find my legal guide on the understanding the different court systems helpful.
You might find my legal guide on legal terms used in litigation helpful.
(Even if you are not filing a lawsuit this information can be useful).
You might find my legal guide on commercial litigation helpful.
Mr. Sarno is licensed to practice law in NJ and NY. His response here is not legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Sarno strongly advises the questioner to confer with an attorney in their own state to acquire more information.