HSBC RETAIL SERVICES RELEASED THE LIEN BUT STILL WANTS PAYMENTS WOOD DALE, Illinois

I bought a motorcycle in April 2007. I bought it for a friend and when my father found out he said No and took over possession and payments of the bike. In October 2007 the bike fell down 6 stairs and all the plastic stuff was broken. Geiko insurance paid to HSBC what they felt the bike was worth which was $5,946.88. Leaving a balance of $5,903.94.

Although there was a remaning balance HSBC gave me a Release of Lien, Stating that the above refrenced LOAN has been PAID IN FULL. The letter also stated: Enclosed is the Title doccumentation that we (HSBC) have on file for your account along with the CANCELED NOTE.

So we (My Father) did not remit any further payments.
HSBC reported the account as CHARGE OFF on my credit.
Now HSBC has sold my account to Fortis Capital II, LLC who is planning to sue me for this debt.

I have already mailed the release of lien to the credit agencies and am in the process of filing the release of lien with the court house.
Fortis has offered me a settlement amount of $4,500. I am considering putting this balance on my credit card. They also offered to fix my credit and remove the charge off, which would give me Perfect credit as all of my other account are handled by me and paid on time.

Can i sue my father for this? As the debt is his.

Why is HSBC perusing me about this if they released the lien?