Can a collection agency force you into a repayment arrangement you can afford?

I recently recieve a collection bill for $1550 reagarding a closed phone account, i contacted them today regarding a repayment arrangement, i explained my financial status and that i was a full time student earning earning $214.00 per fortnight, they damanded that i pay a minimum of $150 per fortnight, i cannot afford this. I am able to make payment of $60 per fortnight at the most. what action will follow?