Debt Validation Explained
What does Debt Validation Mean?
So you opened your mail and seen a threatening letter from a collection agency or collection attorney telling you that you owe them or their client a certain amount of money.
Your heart starts beating fast and your stomach feels sick because you know trouble is right around the corner.
Or is it?
Know your rights. Every single American is protect under the FDCPA in regards to Collection Agencies and Collection Attorneys.
Think about this
Is this debt really yours?
Is it really old and you have no idea if it is yours or not?
Did you already pay it?
Has the state's Statute of Limitations Run out?
Statute of Limitations Explained
Each State has a Statute of Limitations in regards to collecting a debt. Meaning how long a collector has to LEGALLY collect the debt. To use the courts and laws to file judgment against you.
If this Statute of Limitations have run out well they are Shit out of Luck in trying to get a judgment against you. They may still try to collect the debt but if the Statute of Limitations have run dry they are going to have one hell of a time getting a dime out of you.
They cannot legally sue you, legally garnish your wages, legally freeze your bank account or anything they need the courts to help them with. They are all on their own so we say SCREW THEM the SOL is up move on.
Even if the Statute of limitations is up they are going to try and get the money out of you or threaten you anyways because they think you are stupid and don't know any better. That's why it is so important to know your state's laws in regards to debt collection.
If you are in Indiana the Statute of Limitations to legally collect a credit card debt is 6 years. The date starts the first month that you defaulted (stopped paying your account) Get your credit report and look up the Legacy (payments) on your account.
Let's say the last time I paid on an account someone was trying to collect was in January of 1999 and it is November 2007. The statute of limitations have run out and the collector is screwed using the legal system to get me to pay.
I would simply send him the debt validation letter or ignore him knowing I have this proof that the SOL has run dry. I would ignore him.
If he was to sue me I would respond with the SOL DEFENSE and WIN.
Your Rights To Request Validation
The FDCPA allows all consumers to contact Debt Collectors and Collection Attorneys and simply ask them PROVE this is my debt. Validate it. Don't verify it validate that this is truly my debt. The FDCPA gives you this right so that the Debt Collector can prove they have the right person to collect on.
GET YOUR CREDIT REPORT
First you need to get your Credit Reports there is a banner above and to the left if you would like to order your credit report.
Check and see if this so called debt is on your credit report.
Get all 3 credit reports and check all of them. If this debt is on your credit report dispute the debt with all 3 or whichever credit reporting agency has the debt listed.
What you are basically doing when you use a Debt Validation letter is asking the company or attorney to prove that this is your debt. You want to know the name of the Third Party Collector, their address, the amount of the debt and how they came up with this amount. Those are your rights.
These companies need to send you back PROPER validation that this debt is truly yours and they are the assignee and have a license to collect this in your state.
Let's say you live in Indiana and you received a letter from a company in California that is collecting a debt. There are quite a few people that would say throw it out who cares don't even communicate with these people they are in another state.
That is a choice however, they can easily sell the debt to a company in your home state.
So let's again say that you live in Indiana and they do business in California. Send them the debt validation letter. For one, most likely they do not have a License to collect in the state of Indiana, secondly they probably cannot properly validate the debt and so many more reasons they most likely are going to go away.
By disputing the debt with the Credit Reporting Agency and requesting Validation by the Collection Agency all should work in your favor. If the Collection Agency doesn't verify the debt then you need to report that they couldn't validate the debt to the CRA and tell them to remove it.
Knowledge is Power
Why will they go away? Because you were SMART. You knew you had rights! You used the Debt Validation as a weapon against them to prove this debt or get lost!
People who are not aware of the Debt Validation Process we feel so sorry for them. They would take that letter and immediately call the Collection Agency and try to get a settlement not knowing any of their rights.
That's exactly what these scum bags want you to do. FOLD. They want the people who don't know they have rights to pay them.
The people that do know their rights and use the Debt Validation letter 90% of collection agencies just get lost. They open the letter and say crap another one knows their right delete them from the system or sell this debt off we aren't getting crap from this guy.
They hate this letter. Because it shows them you know what you are doing. And most importantly you are using the law to back you up and they must comply!
Step One the Debt Validation Process
Send this letter Certified Mail keep the receipt for proof this was sent. To get the Collection Agency to Verify the Debt. Wait 30 days for a response.
Did the debt come back verified? Did you receive copies of statements in regard to your debt? Signed Contract? Proof that the Collection Agency is the Assignee of the Account?
If you answered YES.....The next step would be to make sure that they are licensed in your state to collect ....click here for all state's debt collector's licensing.
If they have proven your debt and are licensed to collect in your state then you really should contact them and make payment arrangements before they file a lawsuit against you.
Or contact a Consumers Advocate Attorney for help. They still may have broken the law or laws in regards to the way they handled the attempt to collect the debt.
Is your answer NO? Or you are very unhappy with what you received back and feel it's not good enough of proof?
Did you just get a copy of an Agreement Unsigned? That's not good enough!
Even copies of anything isn't good enough. A hard copy is excellent on their end but did you get it? Not a computer copy a hard copy of the debt?
Send them this then:
Most likely they will go away after this second attempt to validate your debt you are showing them you know you have rights and that they failed to provide you with sufficient proof of this debt. They better remove this from your credit report as well.
Didn't hear back from them within 15-20 days? Contact the Credit Reporting Agencies and Dispute the debt tell them to remove it.
Make sure these morons aren't reporting this debt anymore on your reports that is a violation of the FDCPA they cannot do any further collections if they couldn't validate the debt.
If these meatheads are still reporting this debt on your Credit Reports and never validated it further collection activity is a violation of the FDCPA.
Contact all 3 credit bureaus, and tell them that the creditors did not verify the debts under the FDCPA, and send copies of your proof. Request the method of verification, which is your right under the FCRA.
Make sure you state that the collection agency did not respond to your request for debt validation
Method of verification is simply telling the CRA's that you are requesting how the heck they verified this debt. Make them also prove to you how it was validated. You must understand that if the Collection Agency couldn't verify the debt how in the world can they? The Federal Credit Reporting Act allows you to ask for the method of verification of the debt. They cannot just say OK we verified it and it's sticking.........really? PROVE IT. SHOW ME how this debt was validated.
Most credit reporting agencies from what we hear just wait a few days if they even look at your complaint...and put VERIFIED without doing a damn thing. Lazy and caught.........get the method of verification per your rights and get this removed per your rights! They don't want to prove it go look up how to sue a CRA for doing this to you!
If this letter comes back with the same thing again contact an attorney I'm sure they'd be happy to file a lawsuit against the Debt Collection Agency for you. There are so many violations against Collection Agencies we cannot list all of them here! Most collection agencies violate the law at least once with everyone although some are good that's a rare find!
We hope you have gotten rid of them
It is good to have this information under your belt!
Most people who get collection letters freak out or are scared to death. With the Debt Validation letter in hand and usable you'll be amazed at how fast these collections cease!