The collector is way off base. A few choice words from you should send her packing and keep your past in the past!
First, it appears that you are being contacted by an agency that specializes in buying and collecting old debt. The debt is purchased for pennies on the dollar, so any amount that is collected is typically a win for the company. Sometimes these companies will use scare tactics in attempting to collect. And equally often they lack detailed documentation of the debt because it's been sold and resold many times over time. The Fair Debt Collection Practices Act says that a debt isn't collectible without written validation of the debt. If you ask for that validation and the debt collector doesn't have it, then she must go away.
The 1099 form threat is a hollow one, too. A 1099 form is a tax form that is issued when a debt is forgiven. For example, if you settle a $5,000 debt for $2,500, the creditor can issue a 1099 for the amount forgiven: $2,500. The amount on the 1099 form is considered income by the IRS, and you must pay income taxes on the amount. Debt collectors normally don't forgive debts. They usually resell them at a discount. Threatening to issue a 1099 instead of turning a small profit gets the collector nothing and doesn't make much sense.
As for garnishing your hubby's wages, you can forget about it. You weren't married when the debt was incurred, so he is in no way responsible. His wages cannot be garnished.
I recommend that you either ignore the phone calls from the collector or explain to the next person who calls that you are aware of your rights under the Fair Debt Collection Practices Act. Tell the collector that you will not be discussing the debt until you receive written validation.
If they try to bring you into court for this debt, I suggest you see an attorney who is familiar with your state's statute of limitations laws. My bet is that this one is over the limit, so if they attempt to sue, you may be able to countersue and force them to pay you.
By the way, if you want to calculate the real cost of your debt, check out one of Bankrate's calculators.