We know what you’re thinking — more credit repair. And during the holiday season, no less! What can we say? Credit’s on our mind all the time because the role that credit has in our society is growing every day. people are using credit to decide how much your insurance needs to be, whether or not you’re a worthy applicant for a job, or even whether or not you get to own a cell phone. Sure, you can navigate around these things by choosing jobs that don’t do credit checks, getting a prepaid phone and other workarounds, but everything has a price. It’s so much easier to clean up your credit over time. Even though you might not have great credit in the beginning, time and determination can give you back the things that you truly want.
So, onward and upward, right? Right! Let’s talk about debt validation again, in case you might have missed the earlier notes on this.
Validation of debt is simply where you figure out whether or not the collection agency that’s been breathing down your neck actually has the legal right to collect on the debt. They have to provide you proof, and proof is definitely important. A lot of people just automatically assume that a collection agency has the right to take your money without proof, but that’s not the case at all. The truth here is that if they can’t prove they have that right, the debt isn’t valid and it gets dropped off your credit report. But the trouble here is that even though it’s your legal right to do so, a lot of people skip this step, for strange reasons. You see, it’s really just a matter of knowing your rights and fighting for them — but it can be frustrating. You’re going to have to wait long periods of time before you get an answer, and it might not always work out as straightforward as you think.
There is a time limit for validation of debts as well. Debt collectors have to send you a debt validation notice within 5 days of contacting you to collect a debt. You have the right to validate and/or dispute the debt within 30 days of receiving the letter.
As a side note, this is a good reason why you really need to make sure that you’re staying as organized as you possibly can when it comes to this stuff. You want to make sure that you mark down in your calendar not only when the CA addressed you formally, but when the deadline is for you to respond. Make sure that you don’t wait till the last minute — after all, you’re going to need to bake some time in for the debt validation letter to get over to them.
The details that you get with your debt validation request are simple enough:
The first detail that you get is proof that the collection agency actually does indeed hold your debt. It means that they show you that the account has been sold to them or assigned to them from the original creditor.
Your payment history also comes into play — they will need to send you the total amount you owe, including any fees that are added to your debt. You also want to make sure that you know how the collection agency has tabbed everything up.
You also want to get a copy of your original agreement that you signed agreeing to pay the debt. If they don’t provide this, then the validation has failed and you have other options.
So, how do we actually get this ball rolling? Well, simply put — you need to write letters. You need to first start by writing a request letter to the collection agency to validate the debt. There are plenty of validation sample letters online for you to choose from, so don’t feel like this is a step that’s out of your control.
From here, you will need to make sure that the collection agency is licensed to collect money in your state. Not every state requires this. For example, if you live in Kansas and the collection agency doesn’t need to have a license, then you cannot use this defense.
If they do not validate your debt, then you will need to make sure that you save a copy of your validation letter, a copy of the return receipt (given to you when you mail your letters through Certified Mail, return receipt requested), and a statement that the collection agency has violated the FDCPA. Those violations carry severe fines and penalties, but if you don’t know your rights the collection agencies won’t tell you this. They’ll merrily continue on hounding you for a debt that they might not even have the power to collect from you — how crazy is that?
If the collection agency does not validate your debt, then the collection listing needs to be removed from your credit report. This can dramatically raise your score, because collections listings lower it seriously. Lenders realize that if an account has gone to collections, it means that it has been a very late account and thus you are not as willing to pay as other customers might be. So you’ll end up paying higher interest rates until you can build your credit back up.
If the collection agency still won’t remove the listing, then you can file a lawsuit against them. However, before you take that little step you want to make sure that you bring in the credit reporting agencies.
You see, the CRAs know that if something isn’t validated, then it doesn’t belong on your credit report. You might be surprised at how many CAs won’t answer a validation response, or even remove negative listings when they don’t have the proof. This can be something that works very well into your favor — especially now that you know about it, of course.
However, make sure that you don’t just think that the CRAs are your friend here either — if they verify the collection listing but won’t send you the validation proof, then they’re just as guilty as the CA is. You need to send proof that you have attempted multiple times to validate the debt, but the CA has refused to respond. This is a FDCPA violation as well, and they need to be included in your lawsuit. Don’t worry — filing suit is not an expensive process and if you have the facts on your side, it’s one of the best ways to get the company’s attention. No company likes lawsuits, after all.
Validation and verification go hand in hand — basically, you always want to make sure that any company that contacts you truly has the right to collect the debt in question. It’s tempting to just assume that it doesn’t matter, but the reality here is that it very much does — it’s your financial future, so make sure that you protect it at all costs. Why not start today?