Do you have anything in writing from the collector you paid that states your payment was in full satisfaction of the total debt? Sometimes debt collectors sell the remaining balance to a new buyer. Nevertheless, get your bank records and a copy of the lawsuit filed by the new debt buyer. Find out how exactly you were supposedly served in the case. Bring all that to an attorney in your area. Believe me, there are many attorneys in NYC that handle these types of cases. Go to naca.net and do a search for an attorney in NYC.
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You probably are going to need a bit of help from a licensed NY attorney on this one.
I would call Collector B, tell them exactly what happened, in calm, unemotional terms. Don't get angry with them if they disagree with or threaten you. Just tell them that you paid the debt already and have proof, that Collector A sold them an extinguished debt and that you are going to get a judge to issue an Order to Show Cause why the default judgment should not be vacated. Then offer to send them proof of payment (from your bank statement).
If Collector B continues to resist, call a personal injury firm in your town. They may be willing to help you out on this one for free in order to build good will with you in case you or someone you know ever have a bigger case. They may not. Maybe try another.
Here is the local court web page on default judgment: http://www.nycourts.gov/courts/nyc/civil/vacatingjudg.shtml.
Here is the local court web page on answering a debt collection case. http://www.nycourts.gov/courts/nyc/civil/consumercredit.shtml
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Get your banks to show an account statement reflecting the payment. Speak with a consumer lawyer experienced with the Fair Debt Collection Practices Act (FDCPA) to see if you have a claim.
I have written extensively about the FDCPA here: http://nahoumlaw.com/tag/fdcpa/
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