TLDR: terminated lease after continued upstairs noise, landlord sent debt collector, trying to decide if should pay debt collector and sue landlord for money back.
We had been renting an apartment in Massachusetts. For over a year, we had trouble with our upstairs neighbors' noise which got worse until we couldn't sleep more than 3-5 hours at night (we have thoroughly documented these issues and our requests to the landlord to resolve them). After this lead to degraded performance at work, we obtained legal consultation which advised us to terminate the lease since the landlord did not provide a safe and habitable environment (State Sanitary Code, 105 CMR 410.00) which we did. The landlord, a property management, did not agree with this, did not refund us our security deposit despite no issues with the apartment, and wanted us to pay the rent until they find a new renter which we declined. We think they also did not immediately advertise the apartment as for rent as it did not show up on their website. After some months, we were contacted by a debt collector, asking us to pay two months of rent. We told them the claim was invalid for the reasons stated above, but they said they will report the claim to credit agencies as disputed.
We don't want this issue to adversely affect our credit and got legal consulting which suggested we should pay the debt collector to protect our credit score, and then sue the landlord for the money back in small claims court. I'm a little worried about this strategy since it requires to hand away the money first, and am trying to get second opinions.