Should I Accept a Lawsuit to Avoid Increasing Costs?

My loan, which was almost paid off, was canceled. Of the €50,000, only two installments of €702 each were outstanding, as were claims from returned direct debits. I was unemployed at the time and couldn’t pay it. In total, the debt collection company demanded €4,800. I did not agree with the amount and objected to a reminder notice. Now a lawsuit has been filed with the regional court and I don’t know whether I should accept it so as not to increase the costs even further. The letter suggests that a written preliminary procedure be carried out in accordance with Section 276 ZPO. If this preliminary procedure is ordered, in the event that the deadline is missed, a default judgment will be requested without an oral hearing in accordance with Section 331 Paragraph 3 ZPO. If the appointment is scheduled, the court should hold a video conference in accordance with Section 128a. The plaintiff has requested that I be sentenced according to Section 307 ZPO.
I didn’t realize that I would have to have a lawyer at the regional court and I don’t know what would be better in this situation. Accept everything in the hope of not driving up costs even further? The €4,800 has now become almost €7,200 with debt collection and legal fees. I would also need a lawyer very quickly, otherwise the deadline would expire. What would be your advice?