This Article will give an understanding of the relevance of Debt Validation and the importance of Debt Validation Letter in debt verification and validation process.
Under FDCPA, one has a right to seek the validation and verification of the debts claimed against him/her from the creditors or collection agencies to help improve one’s credit scores.
It is an important tool and right that people can exercise, not just to help validate the debt claimed against them but also to save them from the unnecessary harassment till the debt is either proved, paid or disputed in the following course of time.
The creditors are supposed to keep certain information on records regarding their customers for the money they owe to them and make it available at the request of the customer.
Requesting Verification and Validation of Debt from the Creditors and Collectors
When a creditor or a collection agency or an attorney calls you to inform you that you owe a debt, at the same time they are also legally bound to send the written notice letter on the debt claimed from you, within the 5 days from the first call/contact.
You always have the right to seek the verification and validation of the debts from the creditors and the creditors are bound by the law to provide you with the requested information to prove the debt against you.
After receiving the debt letter notice from the Collectors, you have a time of 30 days from the receipt of the letter, to send your written request letter to the Collector to provide the details on the debt claimed against you.
It is also important to send the debt validation letter to credit bureaus as this stops them from calling or contacting you any further, and halt their next actions, during this period until they send you the requested information, verifying and validating the debt against you.
In the same debt validation letter to credit bureaus, you can also mention and request for no calls and ask for all the correspondence to be directed to you through physical mail only at your address. This indeed gives you the breathing time and it also saves you the hassle and harassment due to the frequent and constant contact and calls made by these collectors.
Debt Validation Letter
The debt validation letter is the letter that is sent to the creditors to provide information, verify and validate the debt against one. A debt validation letter should ideally include the following information:
- Requester’s name and address
- Original account number or file number
- Statement disputing debt and the validation request
- Request for contact to halt/hold (optional)
- Request for arbitration (optional and if applicable)
See a sample template of the debt validation letter to credit bureaus here – debt validation letter template
Though there is a 30-days of time-frame limitation for you to respond or dispute to the debt notice letter initially sent by the creditor or the collection agency, but on the other hand, the creditor or the collection agency is not bound by any such law to respond to your validation request letter within any stipulated time frame.
In case, you do not dispute or request for the verification and validation of the debt claimed against you within 30 days from receiving the debt notice letter, the collectors automatically assume the debt to be valid and continue to contact you to recover the debt.
Sending a validation request letter not only stops them from contacting you but they are also bound to stop and initially report it to the credit bureau until they provide the details and prove the debt against you. The response from the creditor may take a few weeks to few months to a few years. Till that time, the creditors and collectors are bound to stop contacting you for any collections against the claimed and disputed debts.
The debt collector’s first contact letter should ideally have the following information listed –
- The amount of debt claimed
- The name of the creditor to whom the debt is currently owed
- Information on raising dispute within next 30 days
- In case of no dispute, the agency will send the verification of the debt to you, assuming it to be valid
- The name and the address of the original creditor are requested in the validation request letter (in case the original creditor is different from the current creditor), the agency is required to provide the requested information on the original creditor to the requester.
In case, you do not hear from the creditor or the collection agency on your validation request letter at all, you can next go and look for your credit report in next 45 – 60 days to check on the same.
At times the debts are sold to the third party and the third party has no, less or inadequate information to provide as sought by you or to prove the debt against you. In this case, either the debt is eliminated or they withdraw the same from your report, without replying to your validation request letter. This helps you clear your credit report without any further discussions or dispute settlements.
In case the Creditor does not have the requisite information or are unable to prove the debt claimed against you, they may also withdraw the debt claims.
Just in case the debt claimed against you is actually owned by you, in this scenario, after validating the debt and per your financial capability, you can either get into a dispute (if applicable) or a settlement to further validate or negotiate a settlement with the collectors.
In any case, the debt validation letter helps you buy out the time to seek, collect, dispute or pay back the debts claimed against you by the original creditors or the collection agencies.
So, it is important and imperative for anyone to be aware of and be well informed of their rights and the processes, while dealing with the debt claim issues with the creditors or the collection agencies.
Understanding the importance of responding back in time to the debt notices and taking a timely action within the stipulated time-frame, not only saves one from the nuisance and harassment that follows the collection process but also protects one’s credit report with getting the authenticated information or by agreeing to settle down and clear the debts.
The debt validation request letter for verification and validation of the debts is not just a tool but the way of life when it comes to dealing with the notices, legalities of debts validations and management, at the same time; maintaining a good credit report at all the times.