Sued by collector

I was notified yesterday that I'm being sued for a credit card debt dating back to 2001. I don't recall the debt. I had a credit report done 2 years ago and it was not on at that time. I have 21 days to respond to the lawyer. The amount is $4000 (after years of interest)

 

Can they continue to charge interest once it has been sold to another creditor?

Is there a chance the to settle for a lower amount or is this locked in?