ING threatening to file suit?

I just got certified mail from ING demanding payment, because a bill pay deposit I scheduled got returned and now there is a negative balance on that account. They say that they will act within their legal rights, including "contacting people that know me to find out my whereabouts and file suit." What can I do? And why would they say "to find out my whereabouts"? What does that have to do with anything? It seems like they would just report it as a charged-off account instead of resorting to suit so early. I'm unemployed and cannot pay this now. Anyone have any experience or idea?