My 2 cents

While this approach may be LEGAL, ignoring old debts is far from MORAL, once you do have the means with which to make good on the contracts, which you entered into voluntarily. This is part of what’s wrong now.
People want to get off of the hook for mistakes that they have made. It makes everything cost more for everyone, at least those moral enough to pay their own obligations. Think, “What would grandma do?”

I agree about the cease and desist letter

I would hold off on sending that because once they receive your validation letter, they can’t contact you until after they validate the debt, so they will temporarily be off you back with just the validation letter. Rather than a cease and desist (which means they can’t contact you at all) you can write them and request they only contact you in writing – no phone calls.

I’m glad you found a lawyer who will talk to you free of charge. Be sure to mention you believe they are violating the Fair Debt Collection Practices Act. Discrimination probably isn’t illegal in the debt collection world, but telling you they will take your vehicle as payment for your debt is.

Keep us posted!