Debt is a subject that no one likes. Once you are out of debt, you make a commitment to yourself not to return to that place. One morning you are sitting in your home and the telephone rings. Lo and behold, it is a creditor on the other end of the phone stating that you have a remaining balance on an old collection bill. The attitude that comes through the other end of the phone is one of harsh. “Why didn't you pay the bill?” Not an attitude of compassion for whatever situation you may have been through that prevented you from paying the bill.

Are you simply left speechless by the phone call? First, listen to everything the person has to say without the attitude. Once they have finished, you begin to reply that the bill was paid and have documentation. It is important to request they send you correspondence in writing so you can complete your research.

After this correspondence arrives in the mail, what do you do?

1) If you are absolutely sure that you paid the bill, retrieve that information from your folder. The letter that states it was paid in full.

2) Write a letter to that collection agency stating the facts and sending a copy of the proof. Send certified mail. 3) Send a copy to the State Attorney General's Office and FTC.

4) This should close the matter and you will not have to pay anything.

However, if you cannot locate any copies of your settled documents, then you might be in a situation. Depending on how many years ago it was, there might not be any way to retrieve any documentation. You may fall into the situation of having to pay. This will more than likely occur:

1) The company has already assessed interest on the bill raising it to a higher number.

2) Begin the process of trying to settle the bill with the company for a lower amount. Negotiate in writing.

3) Pay it off when you have reached an agreement. Make sure that you keep a copy of the documentation this time that the matter has been settled. I also recommend that you keep a copy of the settlement check. I have used money orders before so that I have a receipt. I attach it to my copy.

When you are in debt and have bills that have to be settled and/or paid off, organization is very important. Collection agencies will try to come back and retrieve money that has already been paid, dismissed on a bankruptcy, or the statute of limitations has run out on. Do not fall into the trap of overpaying, paying late fees because you did not keep the proper documentation. I recommend having a physical file that you keep for at least ten years.

We have a file which includes when each car was paid off and used to get another car, and copies of all the credit reports for the last 10 years. This has been a good thing for us, because I have even come across a credit report or two that showed a bill was settled in full when a collection agency tried to collect on that paid account.

Organization and records are important when restoring your financial future. Keeping documentation for each bill you settle will potentially stop a different agency from trying to collect a second time in the future. However, if you do not keep the documentation you may have to pay those charges and late fees a second time.