Serve and file an Answer to the Complaint to protect yourself from another default judgment attempt and then ask the law firm for a Stipulation of Discontinuance and file it in court. As for going after the law firm, the internet is full of stories about bad service by process servers but I doubt you will get anywhere going after the law firm.
I am a former federal and State prosecutor and now handle criminal defense and personal injury/civil rights cases. Feel free to check out my web site and contact me at (212) 385-8015 or via email at Eric@RothsteinLawNY.com. The above answer is for informational purposes only and not meant as legal advice.
You state that you "settled this account today". I assume that you have documentation from the debt collection agency to that effect. You should demand that the collection agency or its law firm IMMEDIATELY dismiss the action with prejudice. If they do not, you have extinguished your liability on the debt and you should file a motion for summary judgment which, in effect, says that there are no triable issues of fact and the court should decide the matter in your favor.
Third-party debt collectors are regulated by the Fair Debt Collections Practices Act ["FDCPA"]. The FDCPA prohibits a wide range of conduct by debt collectors including attempting to collect a debt for which the debtor is not responsible. The FDCPA provides for the award of up to $1,000.00 in statutory damages, actual damages and attorneys fees and costs. If the debt collection agency refuses to dismiss the matter or continues to make collection efforts, you may be able to bring an FDCPA action against them.
THE INFORMATION CONTAINED IN THIS POSTING IS FOR GENERAL INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE. THE FURNISHING OF THIS INFORMATION DOES NOT CREATE AN ATTORNEY CLIENT RELATIONSHIP. AN ATTORNEY CLIENT RELATIONSHIP REQUIRES THE FURNISHING, REVIEW, AND SIGNING OF A RETAINER AGREEMENT.
If you settled this directly with Portfolio Recovery you need to contact the law firm that filed the complaint right away and have them give you a copy of the discontinuance. If they don't do that you need to answer the complaint. I would recommend hiring an Attorney to assist you to prevent a Judgment being entered and also your Attorney can request that they pay for your Attorney fees.
The answer provided is for informational purposes only and does not constitute legal advice. Pennsylvania residents may call my office for a consultation and if you reside outside of Pennsylvania you must contact an Attorney in your home State for thorough legal opinion.