Is it legal for the collector to threaten you with legal action when they already made arrangements with the co-signer without contacting you?

"threaten" and inform you you of their other legal options is not the same thing. Making arrangements with the co-signor and attempting to collect from you is part of the process of actually getting MONEY paid on the account. YOU as primary debtor are just as responsible as the co-buyer to make the payments. IF you feel you have actually been threatened, call a local attorney for state/case specific advice today.