In this era, it’s more important than ever to be financially responsible. Unfortunately, sometimes even the most careful people can fall into debt.
If you’re one of the millions of Americans struggling with debt, you’re not alone.
More than a 70million people have debt in collections in the U.S. That means one out of every three adults has an overdue bill sent to a debt collector.
Although debt can be overwhelming, you can take steps to get yourself back on track. One of the most powerful is sending a debt validation letter.
A debt validation letter is a formal request for the creditor to prove that you actually owe the money. As funny as it sounds but this simple step can get creditors to back off
This guide will show you how to make a debt validation letter and get the proof you need to dispute your debt.
What is a Debt Validation Letter?
A debt validation letter is a letter a consumer can send to a debt collector to request validation of the debt. The letter asks the debt collector to provide specific information about the debt, such as the amount of the debt, the date of the debt, and the creditor’s name.
The purpose of a debt validation letter is to ensure that the debt is actually owed and that the amount of the debt is accurate. You have 30 days to send a debt validation letter after receiving a notice from a debt collector.
Under the Fair Debt Collection Practices Act (FDCPA), consumers have the right to request the validation of a debt.
As stated in the FDCPA, “if the consumer notifies the debt collector in writing within the thirty-day period . . . that the debt, or any portion thereof, is disputed . . . the debt collector shall cease collection of the debt . . . until the debt collector obtains verification of the debt . . . and a copy of such verification . . . is mailed to the consumer by the debt collector.
It requires the collector to include five points in its communication with you.
- The amount of the debt
- The date of the debt
- The name of the creditor
- Unless the customer provides them a Debt Validation Letter within 30 days, the collector will assume the debt is valid.
If the debt collector cannot provide these items, they have violated the FDCPA, and you can sue them for damages.
Benefits of Sending a Debt Validation Letter
A debt collection letter is an effective way to respond to debt collectors contacting you about a past-due account. This will help to ensure that the debt collector is actually contacting you about a legitimate debt.
But why is it so necessary?
Nearly 50% of complaints filed with the F.T.C. allege that debt collectors attempted to collect on a debt that wasn’t owed. In addition, more than half of all people contacted by debt collectors say that they are being contacted about a debt that is either not owned or for an incorrect amount.
So, by sending a debt validation letter, you can help protect yourself from inaccurate or fraudulent debt collection attempts.
Otherwise, if you don’t dispute the debt within 30 days, the debt collector may assume that the debt is valid and continue collection efforts. This could lead to wage garnishment, lawsuits, and other legal actions.
There are several benefits of sending a debt validation letter:
- It will prompt the debt collector to stop collection efforts until they can provide proof that you actually owe the debt. This includes stopping phone calls, letters, and other forms of harassment.
- It will help ensure that the debt is actually owed and that the amount is accurate. This protects you from being charged more than you owe.
- When you dispute the debt via a debt validation letter, the collector might not be able to provide the documentation that you owe the debt or provide documentation that they have the right to collect the debt.
- Even if the debt collector can provide proof that you owe the debt, you will now have all the information about the debt that you can use to negotiate a settlement.
To understand why a debt validation letter is so powerful, let’s know the debt collection process a little better.
When a consumer doesn’t pay a debt, the bank or lender may sell the debt to a debt collector for a fraction of the balance(approx. 3-5 cents on the dollar). The debt collector then tries to collect the debt from the consumer. This is where things can get messy.
Due to the poor documentation of debt sale and purchase, the debt collector may not have all the information needed to prove that you actually owe the debt. However, It’s prevalent for the debt collector to contact the wrong person or try to collect more money than is owed.
By sending a debt validation letter, you are putting the onus on the debt collector to provide proof that you owe the debt. Debt collectors often find it difficult and expensive to provide this documentation, as it is not always easy to track down the original creditor or verify the debt. This may prompt them to give up for the meantime or move on to another easier target.
In another situation, it may be a good idea not to send a debt validation letter.
If the statute of limitations is nearing expiration, it may not be worth the effort to dispute the debt. The statute of limitations is the time limit that a creditor has to sue you for a debt. Once the statute of limitations expires, the creditor can no longer sue you for the debt.
Steps to Making a Debt Validation Letter
1. Gather information about the debt.
The first step is to gather as much information about the debt as possible. This includes the amount of the debt, the date of the debt, and the creditor’s name. If you have any documentation related to the debt, such as a bill or contract, be sure to include copies of these documents.
2. Draft your letter.
A Debt Validation Letter is a legal demand letter. A legal demand letter is a letter that commands the recipient to take or cease an action, often invoking a law to give it the appearance of legality.
Your objective in writing the Debt Validation Letter is to get the debt collector to stop contacting you until they can provide validation of the debt.
a. Write the contact information
Start by writing your contact information and that of the debt collector at the top of the letter. This includes the name of the company, the mailing address, and the phone number.
b. In the next paragraph, specify how the debt collector contacted you. This could be by mail, phone, or in person.
c. Make bulks of requests.
A Debt Validation Letter is basically a list of demands. In the body of the letter, make a series of requests, including:
- Stop contacting me until you can provide validation of the debt.
- Report to the credit bureaus that the debt is disputed.
- Provide proof about:
i. That I owed the debt.
ii. The age of the debt
iii. Your ownership of the debt
iv. The amount of the debt.
v. Your license and right to collect the debt.
vi. The date of the last activity on the account.
viii. A proof of whether the statute of limitations has expired for collecting the debt.
d. If the debt collector violated the Fair Debt Collection Practices Act (FDCPA), you can threaten them with legal action.
Step 3: Mail the letter
Once you have drafted the letter, sign it and mail it to the debt collector.
To mail the letter, all you need is a functional printer and an understanding of using post offices.
Print the document and send it through a trackable method like U.P.S. or FedEx.
Who should you mail the letter to?
Specifically, you should send the letter to the debt collector’s “mailing address.” This is not always the same as their physical or business address. To find the mailing address, look up the company on the Better Business Bureau website.
What if the debt collector doesn’t validate the debt??
If the debt collector fails to validate the debt, they violate the FDCPA. This gives you grounds to take legal action.
Some people may choose to take the debt collector to court without validation. But, validation gives you a stronger case. And, if you do win in court, the debt collector may be required to pay your legal fees.
What if the debt collector validates the debt??
If the debt collector validates the debt, you have three options:
1. Pay the debt.
2. Try to negotiate a settlement.
3. Send a ‘cease and desist’ letter telling the debt collector to stop contacting you.
Is a Debt Validation Letter the same as a Debt Verification Letter
There is some confusion about the terminology used when discussing Debt Validation Letters. The term ‘debt verification letter’ is often used interchangeably with ‘debt validation letter’. However, the two letters basically mean the same thing.
The FDCPA defines a debt validation letter as “a written communication from the consumer to the debt collector requesting that the debt collector validate the debt.” The keyword here is “validate.” This means the letter should ask the debt collector to provide evidence that the consumer owes the debt.
What should I do after mailing the Debt Validation Letter?
Once you have mailed the Debt Validation Letter, you should wait for a response from the debt collector. If they do not respond, or if they cannot provide evidence that you owe the debt, then you can take further action. You can file a dispute with the credit bureau or file a complaint with the F.T.C.
However, here are two crucial things to keep in mind:
- Check your credit reports with the three major credit reporting agencies to ensure that the debt collector reported the debt as disputed.
- Store all of your correspondence with the debt collector in case you need to refer to it later. You can record all phone conversations and keep all emails and letters.
What if I missed the deadline?
The FDCPA specifies that you have 30 days to dispute a debt after receiving a validation notice. However, it didn’t say what happens if you didn’t send a Debt Verification letter within 30 days.
According to the FDCPA, “the failure of a consumer to dispute the validity of a debt” doesn’t constitute “an admission of liability” for any future lawsuits.
So if you missed the deadline to send a Debt Validation Letter, don’t worry. You can still dispute the debt with the credit bureau or file a complaint with the F.T.C. But your chances of success will be lower since you won’t have as much evidence to support your case.
Above all, it doesn’t worth risking your right not to send a Debt Validation Letter on time.
Do Debt Validation Letters really work?
Absolutely! A Debt Validation Letter is one of the most effective tools available to consumers when dealing with debt collectors. A Debt Validation letter works best when it includes a cease and desist letter. This will stop the debt collector from contacting you until they can validate the debt.
Many people report that sending a Debt Validation Letter has resulted in the debt collector ceasing all contact with them. Others have successfully gotten the debt collector to reduce the amount of the debt they owe.
However, it’s important to note that simply sending a Debt Validation Letter does not guarantee that the debt will be invalidated. The debt collector may still be able to provide evidence that the consumer owes the debt. But, this is a fight worth having. If the debt collector can’t provide evidence that the debt is valid, they are in violation of the FDCPA.
What the FDCPA says about debt validation letters
The Fair Debt Collection Practices Act sections that address debt validation letters are as follows.
Fair Debt Collections Practices Act, 15 USC 1692g §809.
(a) Notice of debt; contents
Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing —
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
(b) Disputed debts
If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.
(c) Admission of liability
The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.
(d) Legal pleadings
A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication for purposes of subsection (a).
(e) Notice provisions
The sending or delivery of any form or notice which does not relate to the collection of a debt and is expressly required by title 26, title V of Gramm-Leach-Bliley Act [15 U.S.C. 6801 et seq.], or any provision of Federal or State law relating to notice of data security breach or privacy, or any regulation prescribed under any such provision of law, shall not be treated as an initial communication in connection with debt collection for purposes of this section.
Fair Debt Collections Practices Act, 15 USC 1692g §805
(c) Ceasing communication
If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except —
(1) to advise the consumer that the debt collector’s further efforts are being terminated;
(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.
If such notice from the consumer is made by mail, notification shall be complete upon receipt.
Concluding Remark:
If you’re struggling with creditors, then it is time to take action. A Debt Validation Letter is your first step to getting the harassment to stop.
By sending a debt validation letter, you can ensure that the debt collector has the evidence to back up the debt. If the debt is not verified, you can dispute it and stop any collection attempts. This guide has taught you everything you need to know about writing and sending a Debt Validation Letter.
