I sincerely doubt that they will spend the money to drag you into court. If they do, then show up and tell the story to the judge.

Normally, they continue to hassle you and try to get a settlement out of you. If they can get 1/2 the balance, then they consider this a success.

The worst thing is the damage to your credit rating, if you need credit. Yes, the credit rating is affected by any delinquency, without regard to the amount. Since most agencies simply go by the raw credit score, the robots that work for them probably won't even look at the report to determine the actual situation.