It can be quite stressful if a debt collector suddenly contacts you, telling you that you are behind an alleged debt. It is worse when you don't even recognize the debt.
Knowing your rights in this situation is critical to protect yourself from getting into a legally vulnerable position by simply trying to get out of the debt.
If a debt collector contacts you regarding a debt you are unsure about, make sure not to make any commitment to repay it or provide any further information before you receive a response to your debt validation letter from the debt collector.
A consumer sends a debt validation letter to a debt collector to formally request proof of the debt that the debt collector is attempting to collect.
If a collection agency contacts you, they must send you a written notice within 5 days of the initial contact. If they do not verify your debt, you can request it by sending them a debt validation letter.
All consumers have the right to understand how their debt was incurred under the Fair Debt Collection Practices Act. The debt validation letter must be sent to the debt collector within 30 days of obtaining notice of the collection attempt.
Debt validation letters are created to protect customers from unfair debt collector practices.
Requesting a debt verification letter is a legal and quick way to establish legitimacy before paying or negotiating with the debt collector.
You can ask that the debt collector only contact you through your lawyer, or you can specify which contact methods are permitted.
You can also send an official letter of request to stop debt collection to the collection agency if you do not want them to contact you to collect the debt and want to talk to the original creditor directly.
A debt validation letter and a debt verification letter are nearly identical in content, and the primary distinction is the dispute's nature and to whom you address the letter. The debt collection agency receives a debt validation letter, while the actual creditor receives a debt validation letter.Back To Index
These letters are critical because debt collection mistakes are common. You don't want to pay a debt you don't owe or unintentionally resurrect an old debt that has passed the Statute of Limitations. You also don't want to be a victim of a debt collection scam.Back To Index
Yes, debt validation letters do work. A debt collector is legally obligated to receive debt validation when they receive a debt validation letter. A debt validation letter is most effective when they include a clause of Cease and Desist that requires a lawsuit, and this increases the cost of debt collection and the chances of the debt collector abandoning the case.Back To Index
There are two main advantages to requesting debt validation-
Both of these allow you to take some time to carefully consider your options before taking the next step. It is critical to note that once the collection agency receives the debt validation letter, they are lawfully required to respond before continuing their collection efforts.
You can file a complaint to the Consumer Financial Protection Bureau, the Federal Trade Commission, or the attorney general of your state if your debt collector ignores your debt validation letter or harasses you.Back To Index
In these cases, you should use a debt validation letter -
A debt may be listed as yours at times, but this could be due to an error in record keeping or you being a victim of identity theft. A debt validation letter can prove whether or not the debt is yours. Mistakes can and do happen, and failure to demonstrate you're the person owing the money will cause them to cease contacting you and instead go after the person who owes the money.
If a debt collector contacts you regarding a quite old debt, even if you believe you don't owe some or all of the amount demanded, you can request documents from the debt collector to prove you owe the money. If they can't provide proper documentation to back up their claim, they must stop collecting from you and close their file.
Debt collection agencies constantly buy and sell debts. If you cannot identify the original creditor or the debt, a debt validation letter may be of assistance. Even if the debt collector contacts you for payment under a name you don't recognize, you may recognize the original creditor and the debt and gain clarity.
If you consider making a large purchase, remove any incorrect debt from your credit report. This will help you clean up your credit and get credit approval faster. A debt validation letter can assist you with this.Back To Index
Requesting to validate debt is only a good idea in some situations.
Always remember that it should be used wisely; otherwise, there are high chances it will work against you. These are a few situations when sending a debt validation letter should be avoided
Every state has a Statute of Limitations for how long the debt collector can collect the debt. If you have a debt and know it is nearing the Statute of Limitations and would like to let, it expire, then resolves it. Sending a debt validation letter at this time is the worst thing you can do.
The letter would alert the debt collector that the debt deadline is approaching and raise the chances of them taking collection action against you. Other than this, if your debt validation letter acknowledges the validity of the debt, it can revive or extend the Statute of Limitations in some states.
Always remember, even if a debt collector can't sue you for an expired debt, it can still try to collect it. Also, an expired debt can still show up on your credit report, preventing you from opening new lines of credit and affecting the interest rates you are offered in the future.
If a creditor or collection agency threatens to sue you after the SOL has expired, send them an expired SOL Notification Letter and let them know you are aware of your rights.
If you are certain you owe the money and want to resolve the outstanding payments by negotiating with your debt collector and settling it for a lesser amount, sending a debt validation letter is a bad move. It forces them to dig up the paperwork linked to your account.
It is possible that they would trap themselves in paperwork technicalities and be unable to produce the proper documentation to validate the debt. But it will be wise to pay attention to their chances of producing the requested documentation. If this happens, the chances of them negotiating the payment amount would be very low since you made them jump through hoops.
If you are about to request your original creditor to provide documents to validate the debt in the hope that they lost it and you won't have to pay it anymore, then it is a bad move. You should understand that you are dealing with your original creditor, not a collection agency. There are high chances that they have your documents that prove that you owe the debt.
This will target you as someone playing shenanigans, and your account could be marked for litigation rather than remaining with their (non-litigation) collection department or collection agency.
A debt validation strategy is effective, but there is no logic in thinking it is a one-size-fits-all solution for every situation.Back To Index
Writing a debt validation letter is nothing to be scared about. By keeping a few things in mind, it can easily be done.
You should know that a debt validation letter is a lawful demand letter, and it requests that the debt collector either validates the debt or stops the debt collection efforts. You should have this in your mind while you write the letter.
Here is some information you should ask the collector in the letter -
You can conclude by threatening legal action if the debt collector violates the FDCPA or harasses you. If you are dealing with a zealous debt collector, you can send them a Cease and Desist Letter to get them to stop harassing you or to stop an illegal activity immediately.Back To Index
When you send a debt validation letter to your debt collector, make sure to inquire about the following points:
Make sure to ask who the original creditor is and to obtain proper documentation proving that the debt is yours.
Make sure to inquire about the amount owed, a copy of the most recent billing statement sent by the original creditor, the date of the last payment, and whether the debt is subject to the SOL.
Inquire whether this collection agency is licensed to collect money in your state. If you are confident that the debt is not yours, include any documentation that proves it is not yours.Back To Index
When sending your debt verification request, use certified mail with the return receipt requested. You can use the return receipt as proof that the debt collector received your letter. If you do not receive the return receipt, you can use the tracking number on your certified mailing receipt to check the letter's status with the United States Postal Service.Back To Index
If you send a debt validation letter within 30 days of their initial contact with you, the debt collector must cease attempting to collect the debt, and they must then wait until they can confirm that the debt is yours.
After 30 days, you can send a debt validation letter, but the debt will be assumed valid. While responding to your debt validation letter, the debt collectors may continue to seek payment.Back To Index
Any debt collector who reaches you claiming you owe money must provide you with certain details about the debt. That information includes:
Suppose the debt collector fails to provide the above information during the initial contact. In that case, the debt collectors have to provide you a written notice with that information within 5 days of the initial contact.Back To Index
If the debt collectors fail to answer your debt validation letter because they know the debt is invalid or lacks the evidence to prove it, you are not obligated to pay.
You can sue your debt collector in federal or state court if they don't verify the debt but still pursue payment from you. By doing so, you can recover about $1,000 per lawsuit in addition to actual damages, attorneys' fees, and court costs.
Debt collectors must either send you a validation notice or respond to your validation letter. Otherwise, the Fair Debt Collection Practices Act is violated.
There is no deadline for responding to a debt validation letter. It's just that the collection agency must halt all collection efforts until they respond with answers to your questions.
However, when the collection agency fails to contact you with the required proof to validate your debt, you can send a debt collection dispute follow-up letter to remind them about your query.Back To Index
Debt collectors may validate the debt. In this case, you can -
Usually, the first two choices are considered the best.Back To Index