Even if you pay your bills in full and on time, human or computer error on the part of the creditor can result in your payment not being credited. Getting sued for a debt that you've already paid can provoke outrage, despair and fear over what might happen to your credit. When this happens, it is important to react appropriately in order to prevent damage to your credit and assets.
Consult With An Attorney
Consult with a civil attorney licensed to practice in your state. While some aspects of civil law are the same everywhere, variations in individual state law can make a big difference in your case. An attorney can advise you on how long you have to answer the creditor's complaint, what defenses are available to you and what you should do next.
Respond To The Suit
Even if you have proof that you paid the underlying debt, a creditor can still obtain a judgment against you if you fail to answer the complaint within the time specified by your state's rules of civil procedure. If you cannot afford an attorney, you should admit or deny each numbered allegation of the complaint in a formal answer. Raise any applicable defenses, such as the statute of limitations, in the same document. File your answer with the clerk of court in the county where the action is pending and mail a copy to the creditor's attorney of record.
Talk To Someone In Authority On The Other Side
Once you've educated yourself on the law applicable in your jurisdiction and prevented the entry of a default judgment by answering the complaint, you should call the creditor's attorney of record and let her know you've already paid the debt. Fax any proof that you have. If you can't get a response from the attorney, contact the customer service or delinquent accounts division of the creditor itself. The case could be that a clerk failed to input your payment or the payment was credited to the wrong name or account. Once the mistake is pointed out, the creditor should dismiss the suit.
Complain To The Government And Fight
If the creditor won't dismiss the suit even after you've clearly demonstrated you've already paid the debt, complain to the United States Federal Trade Commission and the attorney general's consumer protection division in your state. Attempting to collect a debt known to be invalid is illegal. For the creditor's attorney, continuing to move forward with a lawsuit which the attorney knows to be based upon falsity is professional misconduct and grounds for discipline; consider reporting the collection firm to the state bar. Make sure you show up for all scheduled court dates even if you can't afford an attorney; if you actually paid the debt, hopefully you can prove this in court.
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