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they went bankrupt and I got a letter in the mail today and they want me to give them all of my earnings or they will refer me to a debt collection agency. what's the deal with this shit? its like more than $7000
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Tell them to fuck of, for what reason do they want their money back?For being out of business?

They payed you so why should you have debts with them?!If they really hand it over to some debt collection agency and tell them some bullshit story let it come to a lawsuite, they can't get any money back they paid you for your work just because they're out of business now, it's just a cheap trick to find some dumb people who are stupid and pay them their money back.