We mortgaged our home to do a debt consolidation in 2000. Our debt was paid off by the company that we borrowed the money from. Now we are receiving statements from lawyers saying that they will be suing us if we don't pay them. I have papers showing what was paid off. We are getting endless letters from people that supposedly have purchased this debt and are now trying to collect...

Is there anything we can do about this and is this legal?

Send them a letter with copies of your proofs of payment (what do those proofs constitute?). Tell them to stop contacting you unless they can provide proof that you didn't pay the account in full.

Contact theTitle Company (closing agent) that did the closing of your loan and paid off the credit cards, if in fact they were paid off in escrow. They should be able to provide you with copies of the cancelled checks. Be sure to have the escrow number handy, so they can locate the old file. Usually the Title Company will pay the balance that was provided to them by the consumer or the Mortgage Company (if the loan was contingent on certain debts being paid). If there were additional charges on the accounts prior to the payoffs, a remaining balance could exist. Good luck.