Debt Validation and What it Means to You

What is Debt Validation and what does this mean to me?

Often times when a debt is ongoing and time has passed chances are that your original debt has changed hands several times by your original creditor selling the debt to third party collectors.

This process can be extremely stressful, especially if there are multiple debts being owed.

This can become a nuisance because you often lose track of who owns the debt, how to handle it, how much you owe, and the most important question: Is this legitimate?

The good news is that every debtor has consumer rights protected under the United States Fair Debt Collection Practices Act (FDCPA).

This set of regulations protects you from ongoing harassment by collection agencies as well as reducing the number of collection attempts. So back to the key questions: What is Debt Validation and what does this mean?

Debt Validation is a right that all consumers have which allows you to challenge any and all debts and allows you to receive official documentation verify the debt in question to ensure its legitimacy.  This will protect consumers from false collection attempts; collectors collecting on previously settled debts, collecting from the wrong person, as well as reducing harassment from collectors who can often be inappropriately aggressive.

How do I go about the Debt Validation Process?

Here I will provide a simple outline for validating your debts and alleviating any inconsistencies and/or errors in a few easy yet important steps.

1. Do not panic.  Always remain calm and know that you are protected.  After all you have laws to protect you.

2. Do not take collectors as being your source of information.  They are bullies; they want to scare you into paying.

3. Dispute all collections that may be erroneous with ALL 3 credit reporting agencies. (Making changes to anything less than all of them will still leave your credit history hanging in the balance.)

4. Research the Statutes of Limitations on each particular debt.  Sometimes the time to collect has passed.  If this is the case send a letter to the collectors stating the error as you have found it within the statutes.

If the collection agency does not remove this listing, request a debt validation. If there is no validation given dispute it with the three credit agencies (Equifax, Experian, and TransUnion).  If this does not immediately correct the error, you may have to sue the agency. (Lets hope you do not have to take it that far)

5. While contacting the collection agencies wait 30 days for a response before proceeding to the next course of action.  When and if you receive a letter of response from a credit agency it should provide you with the following:

  • Proof of ownership of the debt
  • Proof of debt by way of statements and documentation from the original creditor
  • And a copy of the original signed agreement from the original creditor or a credit application

When and only when you receive the above, will it be satisfactory.

6. If they have not sent you the adequate information, respond by sending a letter stating they have not complied with the FDCPA and if the debt is not removed from ALL 3 credit reports, then a lawsuit will be filed.

7. After 20 days if there is no response check to see if it has been removed, otherwise chances are they will not respond.  At this stage most agencies will have removed the erroneous filing from your credit reports.  When you get the letters from the agencies keep them on file in case you need to present them to the 3 credit reporting agencies.

8. If all else has failed, you will have to file a lawsuit in small claims court against the collection agency on grounds that that agency violated the FDCPA and have paper served to the agency.  This will cost a small fee, but it is worth it.

9. Make sure you stay up to date on the status of your verification and debt reporting.  Keep an eye on your credit report and credit score.  The sooner you find errors, generally the easier they are to correct.

10. Any times there are inconsistencies do not hesitate to contact the creditor or collection agencies.  And always be prepared to contact the 3 credit reporting agencies.

Hopefully this has provided you with some great advice on correcting you debts.  This will help you to attain financial freedom and alleviate the burden of debt.

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