Collection with Midland Credit for Southwestern Bell?

Send a Debt Validation letter to Midland, make them prove you owe the debt and that they are legally able to collect upon this. There is a chance, if it is old, that southwestbell and ATT no longer own it, which is why you never heard anything from ATT. Either way, make Midland prove you owe it and that the amount is correct.

If they can prove it, then offer them a pay for delete which is you pay, they remove it from the credit reports. Make sure any deals you get in writing. Always send everything certified mail return receipt.

I guess you should ask for a debt validation to Midland first. As you're having an active account with AT&T you may start talking with them regarding the debt once you get the validated documents.

Listen what they has to offer and make the decision afterward. As the debt was originally from the books of Southwestern Bell, if you think the deal is fair enough you may request AT&T to pull back the account depending on the possibility.

Find out if Midland is assigned by the original creditor to collect on the account. You may be able to deal with the creditor if the account is only assigned to Midland. But if AT&T has sold the account off to Midland then you might have to deal with the collection agency.