My question involves collection proceedings in the State of: Michigan

I have debt with a credit card in the amount of $4000 and have just been sued by a firm that bought the account from the original creditor. It's been four year since the last activity on the account so I know the suit is within the Michigan statute of limitations (6 years)

I am self employed and the only asset I own is a car that is not exempt from seizure (value more than $1000). My bank account rarely has more than a $100 balance

My question is should I attempt to work out a payment plan with the attorney for the collection company immediately? Or file a sworn denial with the court first and wait to see what happens and then try to work out a payment plan.
Are there any good tips for negotiating a payment plan?

Also, if a judgment is awarded, what is the likelihood that they would seize my car if I have no wages to garnish and nothing in my bank account. And if they can't find my car, can they prevent me from renewing my registration