Response to what should i do, they have sent me a solicitors letter

You need to be absolutely clear on one specific point: if in a court of Law, the appellants solictor agreed to a full and final settlement by way of repossession, then this new company has NO right to be chasing you and you could sue for harassment. BUT: and it's a big BUT, if this agreement was not recorded in Court and you have no way of proving it, welcome to the shortfall circus. Read this site from top to bottom before you respond to anyone. Your first step must be to prove that the solicitor agreed there would be no further action taken at ANY point in the future.

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