Home » Searches » I paid the debt off with the creditor (or bill collector) but now the collection agency is saying I still owe them more money!

I paid the debt off with the creditor (or bill collector) but now the collection agency is saying I still owe them more money!

Third party debt collectors are only allowed to add collection fees allowed by the original credit contract, state law, or in some cases federal law. In almost all cases the original credit contract will state that reasonable collection fees will be charged if the account becomes delinquent and collection action is necessary. By signing the credit contract or using the credit instrument, you agree to pay these fees. Additionally, interest can also accrue plus late fees and other similar type charges. For more on this see collection fees and interest on debt

Paid Creditor or Collector in Full:
Here are a few situations that might occur:

1. The debt was not delinquent and you paid the debt off but the creditor mistakenly sent it to collections.

ANSWER: Call your creditor immediately and ask for a manager, then explain that you paid this debt in full and can prove it. Insist that the creditor send a “paid in full” statement to you right away. Then demand the account be pulled back from collections and your name removed from any black list. Next, ask if it’s been reported to any credit bureau and if so, insist any negative information be removed and the account reported accurately (paid in full – not delinquent)

Finally, send a follow up letter to the creditor outlining what happened, what they agreed to do about it, who you spoke with and the time and date. Send this letter return receipt requested. DO NOT forget this part. Having agreements in writing is your only protection.

2. You paid the debt in full to the creditor between the time the creditor sent the account to a 3rd party collector and the collector called you.

ANSWER: Assuming the debt was delinquent. (If not, see number one above). You could still be liable for reasonable collection fees. Call your creditor immediately and ask for the exact date the account was sent to collections. Then, using that date, make sure they did not violate any rules outlined in the credit disclosure statement such as notifying you before going to collections, grace periods and anything else that might have prevented the account from going to collections. If they did violate one or more rules, use it as leverage to have the fees removed.

If they did not violate any rules and the account was delinquent, then they are within their rights to send the account to collections and you may have no choice but to pay the fees. Be sure the fees are legal. Try to negotiate out of paying the collection fees by reminding your creditor of your good payment record, number of years as a customer, and so forth. If they refuse, try to negotiate the amount of the fees. If they agree, send a follow up letter to the creditor outlining what they agreed to, who you spoke with and the time and date. Send this letter return receipt requested.

3. You paid the debt in full to the creditor after a 3rd party debt collector called you.

ANSWER: If the debt was NOT sold, see my answer to number 2 above because most of that still applies. However, if the debt was sold and the creditor accepted your payment in full, there is a deeper legal issue here because the creditor no longer owned the rights to the account and should not have accepted your payment. Immediately dispute the debt with the collector using this paid-in-full sample letter. The issue is should be between the collector and the creditor because the creditor was already paid for the account and now they accepted your payment as well. It should be up to the creditor to settle with the collector. Do everything in writing and keep accurate records. Keep in mind that the collector legally purchased the debt and the rights to collect it so you could end up paying the debt twice and then suing the creditor to get your money back.

4. You paid the debt in full to the collector.

ANSWER: When collectors say you still owe them money after you’ve paid them in full, it’s almost always because the agreement was not in writing. A typical scenario is you offer over the phone to pay a certain amount but only if the collector will accept it as payment in full. The collector readily agrees and you send the payment right out. A few days later the collector calls back and says you still owe the rest of the account. They use a myriad of excuses why the account is not paid, but the real deal is they believe that because you paid the first amount, you can afford to pay more. Without the agreement in writing BEFORE paying the debt, you have no real proof of the agreement and the collector knows that.

You have two choices; pay the additional amount or refuse to pay it. If you choose to pay make sure that you are only paying the amount that collectors can legally charge.

If you choose not to pay, send a letter that clearly states the verbal agreement details, especially the time, date and amount of payments. In the letter state that you consider the account as paid in full. The collector could still try taking you to court, and depending on the amount of the debt, might just do that. Don’t panic! Go to court prepared with all of your documentation. Check your state laws to see what they say about verbal agreements as well. Some states accept verbal agreements the same as a written contract. The key is to show your good faith in resolving the issue especially with a record of payments.

Whichever choice you make….do it in writing!

* The answers on this page assume the collector is a 3rd party collector and not an internal employee of the creditor collecting the debt.

confidential informationThere may be instances where discussing your situation over a public forum could potentially compromise your interests. On these occasions we will contact you directly via email in order to answer your inquiry in a confidential manner.


  1. My insurance company said I owed the dentist $88 as my portion of the bill. I called to get there address. I mailed them a check. They in turn made a check out in my name and sent it to a collection agency as a payment. How can they get away with doing this?

    • Did you receive a collection letter? You may have experienced some sort of Fair Debt violation(s), the Debt Help Lawyers at this site can provide you a free, no obligation Fair Debt consultation. The worst thing to do is nothing, so call us now at 888-595-9111 and we will get started figuring our how to help you!

  2. I paid a debt collector after settling with them, they never sent me a paid in full letter I had set up 4 payments with them after thinking everything was taken care of 7 months later now I am getting calls from another collector saying I still owe money. The first debt collector will not answer any phone calls or emals from me. I verified that I made those 4 payments but they said it doesnt matter without a pain in full letter. What can I do about this.

    • Pretty common. Call us, we’ll gather some facts and we’ll get it taken care of.

      • Latrice Robinson-Smith

        I know I have paid of a few collections, but I have not received any paid in full letters. I’m working on my credit and to get these jerks removed I need those letters. I several times within the last 2 months to request, but no letters. Who can help with that?

  3. I had a debt collector after me for a credit union they garnished me over 800 I only owed may 600 to bank I know there are fees. They stopped garnishing saying paid. This was 4 or 5 years ago. Well I walked into the credit union to get a letter to say I paid it n in good status. They lady says yes the debt collection says you paid it off but you still owe us 331 and some cents. How do I owe if they said I paid all in full. So confused even the lady was confused. Any advise.

  4. I am trying to help a friend or who is overwhelmed by her situation. She and her boyfriend of 5 years are splitting up so she tried to get an apartment. She found out there was an eviction on her background check staying she owed $6000. When she spoke to her boyfriend about it she found out it was from a place they stayed at and the landlord had sued them for damages to the yard etc. They went to court and settled in court for the $3000 that he said they owed. They paid in full and she had court documents stating this. Some where along the line none of this showed up on her boy friends credit and it showed up double the amount on her credit so the court documents aren’t helping her since the two balances don’t match (but it is exactly double). The apartment complex contacted the landlord to try and get a statement from him staying that he had been paid in full and that it was the $3000 not $6000. Now it looks like the landlord is going to try to lie about it to paint her into a corner so he can make more money off of her. What are her rights and what action can she take in this situation? Without his release she can’t get into any apartment complex. This is in Colorado. Thanks for your help.

  5. I recieved a letter from the creditor with an offer to settle the account. I called them and said that I want it in writing and also sent a copy of their letter along with the payment and they are still continuing to call me multiple times a day. What can I do about this harassment after the account being settled?

  6. Am I able to charge the collection department a fee for sending proof that I paid my bill?

  7. A credit bureau sent papers to take me to court if I didn’t pay in full what I owe so I agreed to pay them in 2 separate payments. 8 months later they called me saying I owe more money, I told them I already paid everything and they want me to send proof. All I have is a confirmation number and bank statements. They called again and said they can’t find any proof I paid In their systems. The debt is off my credit report, what should I do.

  8. i had a collector call me stating i owe $200.00 for a dental bill. they also said i owed a $60 collection charge. I said I will have to look into this. I went home and have the $200 bill from the dentist and paid it. nothing from a collection agency. Now 2 weeks later i get a bill from a collection agency showing the payment to the dentist and a $60 fee i owe them? this is not a credit card.

  9. I paid off my fitness membership bill and closed my contract in November. I received in writing a statement which states I do not owe any money. I have a zero balance. It also shows the contract is closed. However, for the last six months I have received intermittent calls requesting I pay the already settled bill. Each time, I provide a copy of the zero balanced closed bill, and I respond in wiring, etc. I have shown up at the fitness center three times. I have called their corporate center (no response). I have provided copies of the cancellation and zero balance receipt. I have provided a copy of the termination of the contract. They still call. I am exhausted and at this point I just do not know what to do. How do you get them off your back if you’ve paid up and you have proof? It’s like they refuse to take no for an answer, and at this point even if I paid the amount they say I owe ($20?!!) I can’t trust that they will leave me alone. I have already paid and I have the receipt and they are bothering me.

    • Lots to unpack in there, and the ramifications of their misunderstanding could appear in the future, e.g., on your credit report. But what you mentioned could be first party FDCPA, TCPA, and/or even EFTA depending on some additional facts. We sent you an email, did you call or respond? Please do.

Leave a Reply

Your email address will not be published. Required fields are marked *