You’ve read the headlines. Over and over again, debt collectors are calling people who don’t owe them a penny and harassing innocent people into paying debts that aren’t owed. An excellent example of this is documented in American Banker’s exposé on Bank of America’s debt sales in 2009 and 2010. It turns out, Bank of America sold debt “as is” and (from the article) “It also stated that some of the claims it sold might already have been extinguished in bankruptcy court. B of A has additionally cautioned that it might be selling loans whose balances are “approximate” or that consumers have already paid back in full. Maryland resident Karen Stevens was the victim of one such sale, which resulted in a three-year legal battle (see related story).” I wish I were kidding.
Since debts seem to be swapped between banks, credit card companies, and debt collectors like kids trade…whatever it is kids are trading now (Tamagachis? Pokémons? Indecent phone messages?) Anyways, a loan you take out at one place may end up in the greasy hands of another not-so-pleasant establishment. What’s a person to do when the debt collector comes calling for a debt that isn’t owed? Well, if you have proof that your debt was satisfied, you should be in good shape, even if you’re sued.*
Usually, you can get harassing phone calls to stop if you have proof that you paid off the debt, which is why the letter I receive that says I paid off a debt is scanned into my computer and I build a file that proves I paid off the debt. I never throw the debt payoff letter away, and neither should you.
* I am not a lawyer, nor do I play one on the internet. My understanding is that this is general knowledge. If you have questions about your specific situation, call a lawyer.