Paid Debt Through Original Creditor, What Now?

[CryptoWI]

The issue arose from the state of Virginia contacting me at an incorrect address thus I was unaware of the debt.  They assigned the debt to a collections agency name Penn Credit

Penn Credit sent me a letter and advised I pay them or contact them to ask for proof of debt and I had till January 4th 2019 to do so.

Below is what I did with a timeline to help those that run into the same issue

I contacted the state and decided to pay directly through them and received confirmation of payment- 12/20/2018

I sent a certified letter to Penn Credit requesting proof of debt- 12/26/2018

Certified letter was recieved by Penn Credit- 12/31/2018

My question is what do I do if they decide to put a collections account on my credit report?   I feel like its inevitable.

Thanks much for any inputs

[Anonymous]

If they verify the debt has been paid there is no collection to put on your report anymore...

[CryptoWI]

I figured that they would use old data saying that I owed a balance, data sent to them initially...maybe I'm wrong?

[Anonymous]

If they do that they need to contact you & say they are collecting a debt. Contact them ASAP BEFORE 30 days and ask them to validate the debt. If they validate it as correct when you have proof of paying it off, you now have legal grounds to sue them or file a complaint with the CFPB. Hopefully RobertEG can see this & give you the definitive answer.

[CryptoWI]

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@Anonymous wrote:

If they do that they need to contact you & say they are collecting a debt. Contact them ASAP BEFORE 30 days and ask them to validate the debt. If they validate it as correct when you have proof of paying it off, you now have legal grounds to sue them or file a complaint with the CFPB. Hopefully RobertEG can see this & give you the definitive answer.

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The certified letter I mentioned in the OP was a validation request sent within 30 day timeline.

[Anonymous]

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@CryptoWI wrote:The certified letter I mentioned in the OP was a validation request sent within 30 day timeline.

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Ah, well then they should verify that the debt has been paid off. If the debt has been paid BEFORE they add a collection account to your CR(s), then there is no debt to collect. If they do create a collection account on your CR(s), it is inaccurate information/validation , which puts the ball in your court.

[RobertEG]

While payment to the original creditor terminated the debt, if the creditor referred the debt for collection assistance while it was still delinquent, which is apparently the case, the debt collector has the right to report the fact that they had collection authority, and can still report their collection to the CRAs, even after the delinquency has been terminated by payment of the debt.

Stated differently, payment of the debt does not terminate the fact that the creditor relied upon services of a debt collector while the debt was delinquent, and does not prevent the debt collector from reporting their collection.

Since you paid the creditor, then there is no substantive issue of legitimacy of the debt.

The debt collector can simply send a finding that the debt was valid at the time they had active collection authority, and could, if they chose, report their colleciton.

However, even though they can still report, when you paid the debt, that terminated any further collection authority after that date, as there is no longer any delinquent debt.  The reporting of a collection would thus no longer serve any profitable purpose in securing payment of the debt, and it is unlikely that they debt collector will now take the time and effort to report.

Regardless, it is now out of your hands......

[CryptoWI]

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@RobertEG wrote:

While payment to the original creditor terminated the debt, if the creditor referred the debt for collection assistance while it was still delinquent, which is apparently the case, the debt collector has the right to report the fact that they had collection authority, and can still report their collection to the CRAs, even after the delinquency has been terminated by payment of the debt.

Stated differently, payment of the debt does not terminate the fact that the creditor relied upon services of a debt collector while the debt was delinquent, and does not prevent the debt collector from reporting their collection.

Since you paid the creditor, then there is no substantive issue of legitimacy of the debt.

The debt collector can simply send a finding that the debt was valid at the time they had active collection authority, and could, if they chose, report their colleciton.

However, even though they can still report, when you paid the debt, that terminated any further collection authority after that date, as there is no longer any delinquent debt.  The reporting of a collection would thus no longer serve any profitable purpose in securing payment of the debt, and it is unlikely that they debt collector will now take the time and effort to report.

Regardless, it is now out of your hands......

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Great post!    Would the only recourse be to send GW letters? Filing disputes would be a waste of time?