There are tens of millions of American swimming in debt, and the majority of those that owe some debt have hard times paying their backs on time, especially unsecured debts such as utility bills or credit card bills.
However, no matter the nature of the debt, it is important to pay it back, and when you are late with your payment, the collectors might be aggressive to get their debt back, even trying to make you pay debts that you actually don’t owe.
That is why receiving a piece of legal information about your debts is important and reviewing that information to make sure you actually owe it.
This process is called a debt validation letter, and we will talk about what is debt validation letter.
Key Takeaways
- You get 30 days to dispute the debt as part of your rights if you think you do not owe any money.
- By disputing the debt in writing, your debtor cannot contact you in any way until they confirm the debt in writing to you.
- Your debtor needs to legally provide some information about the nature of the debt and other details if they contact you for a debt you owe.
What Is Debt Validation Letter?
If you owe a debt and you are late with your payments, you can expect your debtor to contact you one way or another to inquire about the debt or legally ask for the payment.
However, if your debtor is reaching out to you about a debt that you owe, they need to legally provide some information about the nature of the debt and other details.
This information includes their name and the exact amount you owe to them, mentions some of your rights, like the right to dispute the debt within 30 days, and that they need to provide written evidence of the debt if you choose to dispute it.
If they call you first, you need to urge them to contact you in writing for the first time so that they can send you the debt validation letter with all of that information within five days of asking. 1
Read: What Is Debt Settlement?
Why Do You Need A Debt Validation Letter?
Did you know in the year 2020, the Federal Trade Commission (FTC) received approximately 82,700 complaints regarding debt collections, and 49% of them where for debt they didn’t even owe? This is the reason why you need a debt validation letter.
There are chances that your debt may not be real, or it might be years old or resold again and again.
Creditors often sell the debt to debt collection agencies, but these agencies do not have the best record-keeping skills, so they might end up contacting the wrong person or for an incorrect debt.
If you pay the debt straight up before asking for a debt validation letter, you may end up:
- Paying for a debt you didn’t even owe.
- Paying to scammers.
- Paying debt after the statute of limitations time has ended. 1
What Does A Debt Validation Letter Include?
Within five days, when a debt collection agency contacts you, they are supposed to send a debt validation letter to inform you about the debt they mean to collect.
So what does a debt validation letter includes?
- The name of the creditor or the debt collection agency.
- The total amount owed.
- A statement that states that the debt will be assumed valid if the person contacted does not respond to the letter within 30 days.
- A statement that says if you request debt verification, then the debt collector will verify the same via direct mail within 30 days.
- A statement that states if you want details about the original creditor, then you must have it within 30 days. 2
What Happens If The Collection Agency Fails to Validate the Debt?
According to the Fair Debt Collection Practices Act, the debt collector must respond to the request for a debt validation letter.
Failure to do so means a violation of the act, and you can report this to the state’s attorney general.
You can even use them for up to $1000. Just make sure you keep a written record of all the conversations that you may have with these debt collectors.
Collection Of Debt
Once you receive a debt validation letter, you have two options. The first one is to pay it if you think that you actually owe the money and have nothing to dispute it.
But if you believe that you do not owe that money or the statute of limitations already expired, or some other thing that makes the debt illegal to collect from you, you have 30 days to dispute the debt as part of your rights.
By disputing the debt in writing, your debtor cannot contact you in any way until they confirm the debt in writing to you.
If you decide to dispute the debt, you must send the dispute letter with certified mail to have proof that you sent it and the debtor received it.
What Happens When The Debt Is Validated?
Debt Verification Vs. Debt Validation Letter
| Debt Verification Letter | Debt Validation Letter | |
|---|---|---|
| Who sends it? | You. | Debt collector. |
| What does it say? | Disputes the information in the debt validation letter. | This outlines the specifics of your debt. |
| How much time to respond? | Within 30 days from receiving a debt validation letter you need to send a debt verification letter. | Legally, debt collectors are required to send one within five days of first contact. |
Writing a Debt Verification Letter
A debt verification letter can bring some respite from the constant calls from debt collectors.
Once you send the debt verification letter, the debt collectors can’t contact you unless the contact is in response to your letter.
While writing the debt verification letter, you will obviously include that you do not owe the debt they are trying to collect.
But what other questions do you include in a debt verification letter? Here are some things that are worth including:
- Proof that reveals the debt actually belongs to you.
- Details of the last action on the account.
- Proof of how much you owe.
- The debt owed is not past the statute of limitations.
- Proof that the debt collection agency has the legal right to pursue this debt. 3
The Verdict
To conclude, having debt is something that tens of millions of Americans have to endure and fight with.
Since there are so many different debts one person endures, it is possible that you might be late with your payments, and your debtor might contact you asking for the payment.
Alternatively, we recommend your try companies for debt settlement that can help you get out of your debt within 5 years.
However, there are certain requirements your debtor needs to follow if they want to ask for their debt officially, and it has to be in writing with the information included in it like their name, the amount you owe, and your rights.
FAQ’s
What happens after you have sent the debt validation letter?
You will have to wait for the collection agency to send the debt validation letter.
After receiving it, you will get 30 days to dispute the debt and to ask for written evidence from them.
What happens when the debt is not validated?
If the debt collector is unable to verify the debt, then they will have to stop contacting you.
Also, they are required to inform the credit bureau about the same so that the debt can be removed from your credit report.
How long before a debt cannot be pursued?
For most debt, the time limit is six years since you last made payment or wrote to the creditors.
Traci is a highly experienced debt resolution expert with over 8 years of expertise in helping people become debt-free through various debt relief programs. As a former employee of a well-known debt relief company, she possesses exceptional knowledge and skills to take care of debt-related issues.
When not writing about debt, Traci can be found conducting in-depth research on the latest developments in the industry to ensure that she stays up-to-date with the latest trends and strategies.
ARTICLE SOURCES
The National Planning Cycles is committed to producing high-quality content that follows industry standards. We do this by using primary sources, such as white papers and government data alongside original reporting from reputable publishers that were appropriate for the accuracy of information while still being unbiased. We have an editorial policy that includes verifiable facts with due credit given where applicable.
- https://www.investopedia.com/the-importance-of-a-debt-validation-letter-5114040#:~:text=A%20debt%20validation%20letter%20is,owe%20the%20debt%20collector%20money.[↩][↩]
- https://www.nerdwallet.com/article/finance/debt-validation-letter[↩]
- https://www.solosuit.com/posts/make-debt-validation-letter-guide[↩]