I am in China and I got into some kind of scam and owe 1200 to paypal. I don't really have money right now, so when I tell them that I'd pay in like 5 or 6 months they threatened me saying that they would take legal action. So, what are their options here? Can they sue me or send a collection agency after me?
Yes.They will send it to a collection agency in your country, if you don't work out a payment arrangement with the collection agency then they will take you to court and get a judgement. When it gets to the collection agency then it goes on your credit.
I don't think they will go to courts just for 1200 USD , they will keep sending you some emails but court ,,, dont think so
They will never go to the courts or sue you. It will cost them 10x or even much more than the amount you owe them. They will just threaten you for a while and forget about it after all.