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Well if you have all the paper work and you know you do not owe any money then let them take you to court and file for back saying that they owe you for wages lost and turn this into your favor. You have too many things on your side to back you up
what state do you live in?
I would send a letter to the tradeline owner by cmrrr. It depends on whether it is the original creditor or a collection agency whether this is a 623 or DV
Also, start with disputing this on your credit.