How did you learn that they're taking you to court? Did you get an actual summons, or just a nasty phone call or letter from these jerks? If you didn't get a summons, I'd say they're bluffing and I would ignore them. If they call back again, just tell them you'll see them in court.
If you did get a summons, it's nothing to be worried about. No reasonable judge is going to side with these idiots. I assume this would be in small claims court. You'll probably have to meet with a mediator to try to settle it out of court before you see the judge. I don't think they helped their case by driving it without plates and insurance; the judge isn't going to look kindly on that.
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