My question involves collection proceedings in the State of: Michigan

I borrowed a $5k loan from a bank in 2005, then became disabled and have been on SSI since 2009, unable to repay it.

Shortly after my SSI began, I received notice from a collections agency that my loan had now increased to $9k with interest and they were suing for the balance.

I explained to them that I had a disability that wasn't expected to improve and my only income was SSI.

They told me they weren't allowed to take social security income from me. But if I ever started working again or came into a large sum of money (inheritance/lotto etc) that I would be required to pay them. And told me if I went to court and signed a sworn statement agreeing that I owed the money, I'd essentially become exempt from having to repay it while disabled.

So that's what I did and I have remained disabled since (and they haven't contacted me since), but a week ago I received a Request and Writ for Garnishment of Income Tax/Credit from the court, submitted by the same collections agency but now saying I owe $22k with interest. And then today they sent me forms requesting information about my income, assets, bank balance, car make/model, monthly expenses (rent/food/utilities) etc, warning that if I don't complete them in 14 days they could subpoena me to court.

1. I don't pay income tax because SSI is my only income. So do I need to do anything about the Writ for Garnishment of Income Tax/Credit?

2. If I'm still disabled on SSI, am I required to submit this info to them about my income/assets/expenses?

I understand they may want to verify that I'm still on SSI, but if that is all, why do they need my bank balance/car model/expenses info?

I haven't owned a car for 8 yrs, but I've been saving some of my SSI each month and finally have enough to buy a cheap used car (which I was actually planning on buying this week). So I'm worried if I show them that I have some extra money in the bank before I buy it, they'll try to garnish it. And also wondering if I buy the car first and then submit my income/assets/expense info with the car make/model, can they repo my car as repayment?

3. Is there a way to stop/reverse the interest accrued? Since both parties have an agreement that I'm unable to repay due to disability, shouldn't the interest have been put on hold as well?

4. Would filing for Bankruptcy eliminate this debt?