There is nothing to update, the account is closed. Wage garnishment can only occur through a court order. Your lender closed your account, sued you in court, won, and got a garnishment order against you. The money that is being garnished from your checks isn't going towards the closed account, it's going towards the legal judgement against you.
Judgements no longer show up on credit reports, so your credit report will never have any record of the "payments" being taken out of your paychecks. Basically, this is now a legal matter, not a credit matter.
There is nothing for you to dispute or handle. All you can do is make sure you don't put yourself in a similar situation again.