old credit card that was paid off and now i am being told i

i had paid off a credit card on december 12 2002 and asked to close the account but was told that if i close it out i could not reopen an account later so i left it open and 5 years later a collection agency started to garnish my wages with out notice i went to court and the company never showed up the judge told me to file a police report after i produced the copy of the payoff check that was deposited and dated by the company and also was never given any information about the charges that were made i was instructed to diliver the police report to the collection agency and let them determine if they wanted to proceede with the judgement i then was told that they would go ahead and contact there boss and contact me and there was no contact with in a few months i went down and was told there was no progress on my case and then 3 years later they are now ganishing my wifes wages with out notice from the collection agency my wifes work just informed us of this on august 18 2010 what can i do to get this taken care of since it was paid off i can not leave for the military until this is taken care of