Debt Validation is a very useful tool when you are forced to deal with collection agencies. Unfortunately, the process can be complex. Time and time again, I see people getting confused by the nuances of debt validation. They get tripped up on things such as:
- The exact protection it offers,
- What a collection agency has to send as proof
- How long a collection agency has to respond.
I decided to answer the most frequently asked questions in an attempt to clear things up.
Q. It’s been 30 days since I’ve sent out my debt validation letter to the collection agency. I haven’t heard a peep out of them. Isn’t this illegal?
A. No. The Fair Debt Collection Practices Act (FDCPA) does not require a collection agency to respond to your debt validation request, even if you answered within the initial 30 day time period. However, if a collection agency does not respond, then they cannot continue collection activity.
Q. What qualifies as debt validation?
A. The FDCPA does not specifically spell out the requirements of debt validation. However, there is general agreement among the legal community and the Federal Trade Commission as to what would and would not be considered proper debt validation.
Proper Debt Validation (any of the following items):
- A copy of a statement from the original creditor.
- A copy of a check from you.
- A copy of an itemized list of charges and payments from the original creditor
Improper Debt Validation (any of the following items):
- A computerized print out from the collection agency/law firm
- An affadavit from the collection agency
Q. I sent a debt validation letter out 3 months after the collection agency first sent me a notice that they were pursuing me for a debt. The collection agency did not respond to my request. However, they continue to call and send letters. Isn’t this illegal?
A. No. Per the Fair Debt Collection Practices Act, if you did not respond within the 30-day period following the first written communication from the collection agency, even if the collection agency does not respond, they can continue to call and write you.
However, you can send a request for an investigation under the Fair Credit Reporting Act at any time and they must respond within 30 days. An investigation request is not a debt validation request, they are based on two different federal laws. Read up on the procedure here.
Q. A collection agency sent me a summons/complaint because they are suing me about a debt. I’ve sent them a debt validation letter as a response. Is this enough?
A. No. If you are sued you must answer the complaint. I don’t know how to say it any more simply – the debt validation process, used or not has ZERO bearing on whether a creditor sues you. If you do not answer the complaint, you will lose the case and have a judgment against you. If you are sued, forget about debt validation.
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Some people like to deal with their credit card debt all by themselves. However, some people do use credit card debt settlement agency. There can be various reasons for going for a credit card debt settlement agency.
Alternative to Bankruptcy, the only reason I can think of to use a debt settlement company is that they want to be taken advantage of.
I received a collection letter from 2 different companies for the same alleged debt within two weeks. I responded to both letters by certified mail asking for verification of debt (After 3 years, I needed time to find the letter from the original creditor stating the account was paid, which I do have along with the cancelled check). I never heard from either company since November. I got my credit report and it states that the account is still in collections last updated Jan 09). Is my next step to contact the Credit Bureau? I am getting ready to leave the states for 2 months, and I don’t want to come back to any surprises. Thank you for your time.
I sent out a debt validation letter and all that I received back was a computer generated none letter head piece of papper saying this is the amount you owe and who you owe it to. I went to 3 different attorneys and each one said that is was more than enough to validate debt and that they do not have to prove that the debt was assigned to them and that this validation would stand up in court as proof that I owed the debt and the amount of the debt. They said that because of the case Chaudhry v Gallerizzo, United States Court Appeals/ or circuit 174 F. 3′d 394, 406 that says.
“Verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming as owed; the debt collector is not required to keep detailed files of the alleged debt. Consistent with the legislative history, verification is only intended to ‘eliminate the problem of debt collectors durning the wrong person or attempting to collect debts which the consumer has already paid’. There is no concomitant obligation to forward copies of bills or other detailed evidence of the debt”. So all the debt collection agency has to do is refer back to this case and even if they scribble on a piece of paper this is the amount that you owe and this is the company you owe it to that is good enough in the courts eyes. So the listing above as proper validation is not correct at least in Utah. Collection Agencies out here refer to that case and get away with sending just a blank piece of paper saying this is the amount that you owe and who you owe it to pay it, and the courts are okay with that. If there is something that I could use to prove that it is not valid validation of debt I would love to know it.
I submitted a debt validation letter within the 30 day period. The Debt Collection agency did not respond within 30 days with validation. They sent it now after 6 months. Are they now entitled to start the debt collection again?