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Resolving a collection account can feel like lifting a weight off your shoulders: You can finally move on. But what happens when it comes back to haunt you again? Can you ever really put a bad debt behind you?

A reader with the screen name “Frustrated” shared their story on the Credit.com blog:

We used a debt consolidation company in 2010 to settle some credit cards. A (credit) card was settled for about half the amount owed and the rest charged off, which shows on our credit report. We are now getting calls from a collection company for the remaining amount. This shows on our credit report, same account number, right below the closed/charged off debt. How can they do this…is it legal?

Another reader, Betsy, says she settled a debt four years ago, but has just been contacted by a collection agency claiming she still owes the debt. Not long ago, she says, she shredded the paperwork she held onto for three years “just in case.” Now she has no proof the debt was paid—and this new collection agency is not only trying to collect, they are damaging her credit as well.

Two new initiatives may help consumers put debts like these behind them once and for all.

The first is through Global Debt Registry, a central repository for charged-off debts, which provides an “Account Extinguishment Report” that can be used as proof a debt has been resolved. Similar to getting the title when your car is paid off, or a notice of “release and satisfaction” when a judgment has been resolved, this document can serve as “definitive proof that an account has been closed and can no longer be subject to collection,” says Mark Parsells, CEO with Global Debt Registry.

To get an Account Extinguishment Report, consumers need to check if it is available on DebtLookUp.com or ask the collector for it. It’s free for consumers, but creditors pay to be a part of the Global Debt Registry, so it may not be available for every debt.

Parsells notes that the collection and debt buying industry has been consolidating rapidly. A firm a consumer has paid may go out of business, and account records may get shuffled around or even lost in the process. If the debt somehow winds up in the hands of another collection agency, it can be a major hassle to try to straighten it out.

And an unresolved collection account not only hurts a consumer’s credit scores, it may hold up a mortgage application as well.

Protect Yourself Against Zombie Debt

Anytime you resolve a debt with a collection agency, get it in writing — before you settle. “No letter, no deal, no exceptions, ever,” says debt settlement expert Charles Phelan, founder of ZipDebt.com. Settling a debt is a change to the original agreement, he explains, and all changes must be in writing. He says he’s seen too many situations where consumers didn’t take this step and it came back to bite them.

And that’s where the second initiative comes in. “When consumers have settled a debt they will receive a closing statement or invoice from the debt buyer,” says Jan Stieger, executive director of DBA International, a trade association whose members represent approximately “80% of the legitimate debt buying industry” according to Stieger. She is referring to the fact that DBA International is in the process of certifying all members, and standards require this information be provided to the consumer. The document should note the debt has been settled in full. Save it in a safe place indefinitely. (Alternatively, you can ask the collector if they will file an Account Extinguishment Report, which will be housed by Global Debt Registry. If they do, it’s not a bad idea to print and keep a copy for your records as an extra back up as well.)

If you are contacted by a collection agency about a debt you believe you have been paid, federal law gives you the right to request validation of the debt. Within five days of contacting you by phone, the collection agency must send you written verification of the debt. Once you receive that, you have thirty days to dispute the debt. Do so in writing, via certified mail. If you believe the debt was settled or paid in full, tell the collection agency that.

“Request a full chain of title,” says Steiger. If you are dealing with a legitimate collection agency, “They will be able to produce it,” she adds.

Don’t be afraid to question a collector if something seems suspicious. Scammers often prey on consumers with bad credit and may threaten them with dire consequences if they don’t pay them immediately. Use the free service at DebtLookUp.com to research a collection agency and read this guide to protecting yourself from debt collection scams.

Get your free annual credit reports to see what is reported. If a debt you paid does not show a zero balance, or if it was subsequently sold to a collection agency, you can dispute it. Paying a collection account typically doesn’t raise your credit scores immediately, but it can prevent a lawsuit that could make them worse. You can see how old debts could be affecting your credit by getting your free credit report summary, updated every 30 days, on Credit.com.

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