GSM sim in AT&T phone not working

I recently got screwed when buying a phone. Come to find out it’s not paid off and can’t be returned even thought the seller never listed many faults in the phone—

The IMEI number is clean, however says can’t be unlocked bc it’s not paid off.

my gsm sim says it’s compatible with the imei code when typed into the website, however when putting the sim in it goes to the activation screen and then says not compatible BUT while on this screen I can receive texts, voicemails?? Any advice