My question involves collection proceedings in the State of: Arizona

I opened a $500 limit credit account in 2009. I believe the account was closed in 2012 due to late payments. My ending balance was approximately $500.

It is now May 2014. Apparently, LVNV Funding has purchased this old debt and they are now trying to sue me with the help of an in-state law firm for over $1000. The first document that I received from the prosecuting attorney was an "Order Authorizing Alternative Method of Service and Extension of Time to Serve". Now they have sent me a document titled "Application for Default and Entry of Default". It also says that I have 10 days to "file a responsive pleading" or else the Default will be effective and the Party may request a Judgement against me.

What should I do now? I never opened any accounts with LVNV. I don't see how I can be in debt to them directly. Do I need to file my written response with the courts? Or with LVNV? Or with the prosecuting attorney? What should my response say? Am I better off calling a bankruptcy attorney? I'm not exactly in a position where I can pay over $1000 to LVNV.

Please help. I'd appreciate any advice here. Thank you!