Advance financial is suing me, advise

I’m being sued by a company called Advance Financial in Tennessee. Two years ago, I took out a “flexible” line of credit with them, borrowing about $4,000. I have already paid around $5,000, yet according to a letter from a law firm, I now owe $5,477.21 plus lawyer fees of $1,825.73.

Advance Financial has transferred my debt to a law firm called Cheadle Law, also in Tennessee. My questions are:

  1. Am I obligated to pay the lawyer fees that have been added to my debt?
  2. What is the best course of action to resolve this lawsuit?

Any advice or assistance would be greatly appreciated!