How to Prove You Paid a Debt


If you have already paid a debt, nothing in the world is more frustrating that receiving a collection letter for that same debt. Here's how to resolve the situation and get that collection agency off your back for that paid debt.

  • Dig up the copy of your receipt or zero balance statement if you have one. If you don't, remember to always request this in the future.

  • Pull your credit report. Find the debt in question. Collection agencies are required to update a debt as "paid" once you have paid it off. Make copies of the page containing the old debt and the "paid" notation. Also check to see if the new collection agency has placed a negative tradeline on your report.

  • Contact your bank (if you paid via check) with the approximate dates and see if they can help you come up with the canceled check, or at least proof that the check was cashed or that your electronic payment was received.

  • Call your old creditor to whom you paid the debt and ask for a zero balance statement. They are required to maintain their records for a period of seven years. If they won't help, KEEP CALLING. It's unlikely you will continually get the same unhelpful customer service rep.

  • Mail a certified letter to the creditor to whom you paid the debt. Let them know that the debt was sold by their company after it was paid off, which is a clear violation of the FDCPA (Fair Debt Collection Practices Act). Let them know that you will make a formal complaint with the Federal Trade Commission and the Attorney General for your state and take legal action if they do not recall the debt.

    Include copies of any documentation you have that proves you satisfied the debt, such as receipts or a copy of your "paid" credit report tradeline highlighted.

  • Mail a formal letter to the collection agency that currently holds the debt. Tell them that the debt was paid. Give dates if you can. Once again, include your documentation if you have any. If they have a tradeline on your report, demand that it be immediately removed or they will face legal action.

  • Demand debt validation via certified mail from the collection agency that currently holds the debt. This WILL hold up in court. If they do send the validation, you have a clear case against the first collection agency or creditor. If they don't send a validation, they must remove their tradeline from your credit report. It's a win/win situation for you.

  • Contact the Credit Reporting Agencies and explain the situation. Here is what to include:

    • Copy of your credit report with "paid" notation highlighted
    • Copies of each letter you sent and to which collection agency it was sent to.
    • Copies of the green cards you received when the letters were signed for (this is why you must send everything via certified mail).
    • Any receipts or canceled checks you have that prove payment of the debt

    Remind the CRAs that selling off a debt that has been paid is against the FDCPA and that reporting the tradeline of the new collection agency is against the FCRA (Fair Credit Reporting Act). Ask that the new tradeline be immediately removed.

Tips & Warnings

  • It is common practice for collection agencies to sell debts that have already been paid. Always get a zero balance statement. If you settle, get a statement that the remaining balance will not be sold to another collection agency.
  • Keep everything. Make a paper trail in case you have to go to court.
  • Do not hesitate to threaten legal action against either collection agency or the CRAs if they do not abide by the law.


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