How to Avoid a Judgment with a Validation of Debt Letter

Can you protect yourself from a court-ordered judgment with a validation of debt letter? Yes, and most people are not aware of the law. This law was passed in 1996 to protect consumers from abusive practices by debt collectors. The purpose of a validation of debt letter is to get the collection agency to prove that it is your debt, that the debt is the right amount, that agency is legally registered in your state to collect this debt and that they have been assigned or purchased the debt. Many people are getting court-ordered judgments placed on them for bad debt and some of them are illegal according to this law.

Instructions

1

Find out if the debt has passed the statue of limitations. Look up your state laws to see what time frame is allowed for collectors to come after consumers for old debts. The statue of limitations varies from state to state and can vary anywhere from four to 15 years for the collectors to still be able to take action. The date that the statue of limitations starts is the last date that you made a payment. If the collection time is beyond the statue of limitations in your state, you can write a letter telling the agency that it is trying to collect on a debt that is past the statue of limitations in your state and that you are aware of the fact that it is illegal. Get a response in writing to this and keep it for any future conflicts. If it is within the legal time frame, then you can write the validation letter to the collection agency.

2

Get the right address to send your letter to. Make sure that you get the right address to send your validation letter to so they can respond back to it. You can usually find the address on the notice sent you when attempting collection. If it is the original creditor sending notices, you cannot ask for validation of the debt since the agency has been sending you billing statements every month.

3

Start a validation letter. Start by putting the date, your name and address at the top of the letter along with the name, address and phone number of the collection agency or law firm beneath that. Then put the account number that is listed on the collection notices along with any file or correspondence number.

4

Request the facts. Make it known that you are requesting validation of the debt it said that you owe according to the federal debt collection law. Ask for proof of the original contract with your signature that you agreed on with the actual creditor. Let the agency know that it is not a refusal to pay, but that you want validation of debt evidence that you are legally required to pay.

5

Wait for the response and respond back. Wait to see what information the agency sends back to you because it cannot legally try to collect, sue or report you to the credit bureau without proving this debt. Send a letter requesting the same thing again with a 30-day time frame to respond. Let the agency know that you are disputing it and that no response means the claim is no longer valid. If the agency sends validation of the debt, contact the original creditor and ask if it assigned or sold this debt to the agency and find out if it has the legal right to collect from you.

6

Decide what to do next. If the debt cannot be validated, you can write another letter stating that you know the law and the agency is in violation of it and that all collection attempts must stop or you will report it to the FTC and your state attorney general. Contact all the credit bureaus and demand that this debt be wiped off your credit report or you will report them also. If it is validated, then you can ride it out and see if it gets sold or assigned to another agency and start the whole process over; if it goes to court, you can appear and work out a settlement or file bankruptcy if no other options exist.