Debt Validation – Know everything about it
If you have always followed your instincts and a DIY( do it yourself) guy, then rest assured it is something that can really take you places. If you want to apply this attitude for repairing your credit, then it is imperative you are familiar with the basics. The first thing you should have holistic information about is the debt validation letter that it can be used to request the creditor/collection agency verify that the debt is actually yours. In addition, you should be well-versed with the facts when this letter should be used, what are the ways in which it should be used, with whom it should be used, and in the end why you should use it. I will be answering all these queries in a detailed manner. Let me begin with the definition –
What is a Debt Validation?
Well, as per FDCPA (Fair Debt Collection Practices Act) you have the right to debt validation or debt verification. It can be defined as a method through which you make the company ( debt collection agency) give a proof that you actually owe the debt and the company has a right to collect it from you.
What is a Debt Validation Letter?
You will want to send a debt validation letter after you have been contacted by the collection agency. After their initial contact, make sure you have their email address and send them a validation letter. you can also view sample debt validation letters online. Ideally, a debt validation letter Requesting Collection Agency To Validate your debt should include the following things –
- Your full name, complete address, and valid phone number.
- The original account number of the file number.
- Statement challenging the debt and requesting validation.
- Request for contact to stop (optional).
- Electing consumer arbitration (optional).
There is no harm in sharing your personal details with the collection agency since they have it anyway. Make sure that any further communication is done via this address only. Same goes for the file or account number as well as it just lets the creditor to easily locate your information.
If you don’t want the collection agency to call you, again and again, the same thing you need to mention in your validation letter as well and if required the correspondence should be done via email only. As per FDCPA, the collection agencies have the right to call you after they have received the letter, but the agency must prohibit after getting the letter.
Credit Card Debt Validation Letter Samples
(Click Here To Download )
How to send debt validation letter?
You have to ensure when you send a validation letter, it should be sent through certified mail along with return receipt requested. If you send the letter in this manner, at least you will have an evidence that you have mailed a letter to the collection agency. If you feel like filing a lawsuit against the debt collector, the return receipts will act as a proof, hence making your case stronger.
Useful Resource: Calculate Monthly Loan Payments
What should be written in a debt validation letter?
Let us discuss what are the things that should go in the debt validation letter?
- You can request for the owed debt amount.
- The name of the creditor or the collection agency to whom the money is owed.
- How the collection agency or the creditor has calculated the debt amount?
- Asking for the copy of the original credit application bearing your signature.
- Showing the proof that the debt is under limitations.
- Proof of the collection agency’s license to make out whether the agency is genuine or not.
- Letting the agency know, that during the validation period, no letters and calls should not be made or else a case of harassment will be filed against the agency or the creditor.
What rights do you have against the collection agencies or the creditors?
Dealing with financial issues can be quite stressful. But, the debt collection agencies, with their repeated calls, make the matter even worse. You enjoy some rights against the debt collection companies which protect you from the unfair methods that these companies often use. Let us discuss these rules –
- These collection agencies contacting a third company or a person other than getting your contact details.
- The collection agency can’t call you repeatedly in the office if you have informed them either verbally or in a written form, that your employer doesn’t allow you attend such calls in the office.
- The creditors and the collection agencies are not supposed to call you before 8 am or after 9 pm.
- The debt collectors cannot lie about the amount that you owe.
- The debt collectors cannot lie about the amount that you owe.
What are your options if You Don’t Receive the Validation of Debt?
If you are of the view that making a request for debt validation is the best available option for you, then there is a fair bit of chance that you may not get debt validation. Let us discuss two key reasons as why the collection agency may not send a debt validation –
- They are not in a position to do the debt verification.
- They lack apt information in order to prove that you can repay the debt.
In the scenario where you haven’t received the validation of debt letter, you are not still out of the trouble. You may not have received owing to the reasons mentioned above and what is worse is that the debt still shows up on your credit report. There can be one more possibility i.e. the collector is interested in sending it but just hasn’t yet.
While you are obligated to send a dispute (written form) of the debt within 30 days, the collector has no such bonding. As a matter of fact, the collection agency is not bound by any time limit to send you the letter requested by you. Owing to this, you should keep a close watch on the whole situation.
What should you do when the Debt is not Yours?
With or without the validation of debt, if you realize that the debt is not yours then make sure you have not wasted your time in disputing it. Disputing the debt is one of the key things that you should be done to abolish the debt from your credit report, but again it is not bounded by anytime.
Therefore, if the collection agency still contacts you for the credit card debt, that is not yours, you should request for the validation of the debt and ensure that it is in a written form and should be forwarded within 30 days. You have to be patient as the whole process can take weeks or in some cases it can take years as well, so it is important you have made the right start. If you have overlooked or having a careless attitude will only make the things worse and eventually will cost you money.
What can you do when the debt is yours?
If you know that the debt is yours but you are unsure about what, ideally, should be your next step then remember one thing that there is a solution and you don’t need to panic. You have to collect all the necessary information that can prove beneficial to you. Let us get to know how you can easily gather this information –
- Firstly, ensure the right collection agency or the collector to whom you will be paying. This can be done by having a closer look at your credit report, then asking your collector for the identifying details, and then again calling back to the agency with someone else just to confirm the details.
- It is important you have checked whether the statute of limitations has expired or not. In the case where it has expired, make sure you have sent a cease and desist letter to the collection agency.
So, are you wondering what’s next? Following are some of the moves you can make –
- If you have all the sources and you have the willingness to pay, you can have a word with your collection agency if they can bring the debt to current so that you make the payment easily.
- If you know you won’t be able to make the full amount, then you can sit across with the collection agency and negotiate a settlement. If you are in a position to pay in full right, then negotiation can really prove effective, therefore you might save some money for the settlement. Let us assume that the negotiation was successful, then ensure that you get the terms and conditions in a written form.
- If you are not in a position to make the payment, taking the help of a bankruptcy attorney will prove helpful. This will prove handy than dealing with the debt management agencies.
Why there is a need to think twice when it comes to disputing a valid debt?
If you depend on the information provided by the online websites and blogs, then you will find the same information being discussed i.e. sending the debt validation letter for a valid debt. Well, they are just trying to be helpful, nothing else. But, having said that, they probably don’t have the idea of the reactions they may receive when they have shared a validation letter. These websites cannot predict the reaction of these websites once they have received these letters unless they have a sound knowledge of the debt collection and what can be the risks.
It can be concluded here that you can make the most of many debt validation letter sample templates. When your debt validation letter is well written, you will make your creditor or the collection agency to validate all the aspects of your debt and halt all the efforts they are making to collect the debt from you.