Can they really do this?

I ended up going negitive in a back account back in 2011-Flagstar bank-They turned me over to collections too JJ Marshall. JJ Marshall turned me over to an attorney and I did get my payroll garinshed. The attorney did serve me with court papers the right way.None the less the debt was paid in May 2012. I have the court paperwork proving the judgement was paid. The attorney never showed up on my collections-just the money judgment showed up and JJ Marshall-It is reported paid also from the court and JJ Marshall. I get an alert today saying something went to collections. So I looked and now the attorney Renner & Renner is showing up as a collection. It is reporting starting in July and in the notes it is saying it is a collection for July 2012-open 1 month. I am disputing it but how should I handle this? I have been working really hard the last three months cleaning up my credit. Any advise would be great. I do live in Michigan not sure if you needed that.