If by pre-legal, they mean they’re preparing to file suit to get their money, you may want to take that offer of $640. You don’t want the hassle of court and the likelihood of a judgment on your reports. You imply that you have $500 budgeted for this - call and ask if you can take the $640 offer but if you can pay $500 now and the balance in a month (or whatever timeframe you can afford - do NOT set up a deadline you can’t make).