You are not alone. The problem you are experiencing is one that is experienced by many other debtors who pay in full or settle an account only to learn that the original creditor or debt buyer has reassigined the account to another debt collector. You should contact a consumer lawyer in Colorado. You can find one at www.naca.net. Our law firm represented a lady in New Mexico whom Farrell & Seldin attempted to garnish for a judgment on an account that was not hers. The case was tried before a jury in Santa Fe, NM federal court before the Honorable Bruce Black. The jury returned a verdict for actual and punitive damages against Farrell & Seldin for 1.26 Million dollars in July 2011. You can find more information at our website: www.hwh-law.com. You may have claims against both Discover Bank and Farrell & Seldin for violations of the Fair Debt Collection Practices Act and Colorado state law. Contact a consumer lawyer in Colorado.
You may contact Luke Wallace at Humphreys Wallace Humphreys P.C. at 918-747-5300 or Luke@HWH-LAW.com. For more information see www.HWH-LAW.com. The response above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyze this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in Oklahoma. See also avvo.com terms and conditions incorporated as if they were reprinted here.
Call my office or another attorney who handles debt collection abuses. If you have provided the lawfirm with a copy of the receipt showing payment and they continue to pursue a debt that is not owed, you may have to pursue legal action before you can get this resolved.
These matters can be handled on a contingency fee basis without any money out of pocket and no payment until your case is resolved.
You can reach Harkess & Salter LLC at (303) 531-5380 or info@Harkess-Salter.com. Stephen Harkess is an attorney licensed in the state and federal courts of Colorado. This answer is for general information only and does not create an attorney client relationship between Stephen Harkess or Harkess & Salter LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues.
In addition to the suggestions made by my collegues, you could call the Colorado AG's office of consumer protection, or call the Colorado Supreme Court's Attorney Regulation Counsel. You can find both of those in the phone book or online. You can also file a "taverse" to the garnishment if the time is appropriate. For that you will need to retain counsel. Good luck!
This general response is not intended to be legal advice because I don't have all the facts. The particular facts in each instance will change the recommendation significantly. Any statements made in your posting on Avvo are not protected by the attorney-client privilege because they are shared with third parties. I require a written contract for legal services, so an attorney-client relationship may not be presumed merely by my response to an Avvo posting.