What recourse do I have to recover a double payment on a defaulted debt?

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What recourse do I have to recover a double payment on a defaulted debt?

I had a past due balance of $1300 on a credit card. I settled the balance with a collection agency for a one time payment of $933 and made the payment in full. One year later, a law firm acting on behalf of the creditor garnished my bank account for the same debt for $1300 plus some interest. What do I need to do to recover either of the payments?

Asked on June 15, 2011 under Bankruptcy Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You need to sue--or rather, you may need to sue, if after proving proof that that the debt had already been paid and demanding repayment, they do not voluntarily return the money. Send the law firm evidence that the debt had already been paid (e.g. the agreement to settle for less than full; and proof of the payment). Since you don't have to pay the same debt twice, the law firm (and it's client, the card issuer) should return the money to you; if they refuse to, you may need to sue them to make them honor their obligation.

One possible wrinkle: if the collection agency was not actually working on behalf of the card company or did not remit the money they collectred from you to the card company, it's possible you may need to pay the credit card issuer (since they did not previously get their money) and sue the collection agency for fraud.


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