You should speak to a lawyer about this. For something to go into debt collection, at least at the bank where I work, there needs to be many missed payments or late payments, and other reason to suspect that the person is not trustworthy.

You may also need to speak to a credit counselor, because this situation could be over your head already.

Collection companies have created a huge business in what is considered old, noncollectable debt. They purchase old debt for literally pennies (or tenths of pennies) on the dollar and so any payment you make will generally repay their capital investment. They have tactics that frequently cross the line of legality and have faced many fines because of it. Some collection companies have even been forced to close because of unlawful and unethical practices. These are the type of guys you are dealing with. If they can just get you to send in a good faith payment of $5, they say you are validating the account balance (and you will have a hard time disputing it) and you also reactivate the account for Credit Reporting purposes. THIS COULD EVEN HAPPEN ON AN ACCOUNT THAT IS 20 YEARS OLD. It is now considered current.

I assume you have retained the letter stating the debt is paid in full. You say it is in error but if the original creditor was satisfied enough to send you a statement to that fact, you need to hold on to it forever. Send a copy of the letter by registered mail (get a receipt) to the creditor and let them know that any further attempts to collect on this account, or to contact you, or harass you in any way, or to report derogatory information to any credit reporting agency, will get them reported to the state attorney generals office.

You have protection from this sort of thing. Find out your state laws regarding collection procedures and statute of limitations. (They vary by state and type of contract).


You are right to be hesitant to react. Yes, they must prove they have the debt, and you may have rights to tell them you will only deal with the original debt holder. As long as you keep the letter showing the debt has been satisfied, you should have what you need in case this bad headache should return one day...and it may.

Ya I have read the blog you mentioned in you post Its nice!
Do I need to speak to a credit counselor? to solve my problem!

I don't know if you need to, I'm not handling your personal finances, but I do know that the sooner you get out of a bad situation, the better you will be long-term.

How lucky is that that the orginal creditor is saying you have paid the debt. I would definently be getting something from them that states that ASAP and forwarding it on to the debt collector.

What was in error? The letter they sent, and the debt wasn't repaid after all? Or... If they sent the letter by mistake and wouldn't back you up now that it's paid, I'm not sure that anyone could help you get out of paying it if it actually *is* a debt you owe. If they *will* back you up and it IS paid, that's probably what I'd do first... contact them to make sure they'll back you up.

What does the new place say about it being paid off?