Proof of Contract Debt Elimination Strategies

Under the Fair Debt Collection Practices Act (FDCA), debt collectors and creditors are required to provide a consumer contractual proof--documents bearing their signature--to be able to prove a debt valid. Without this evidence, a debt can be disputed successfully.

Significance

When entering into a binding agreement with a creditor, you must sign paperwork accepting the terms of the loan and subsequent payments. Without a contract, the creditor does not have a legal leg to stand on when attempting to collect a debt. When a debt goes into default and placed with a collection agency, the burden of providing contractual proof of the original debt falls on them.

Time Frame

You have the right to dispute the debt within 30 days of the original notice from a creditor or debt collector. You do so by contacting the creditor or debt collector and demanding proof that the debt belongs to you. Under the FDCA, the creditor or debt collector must reply within 30 days and provide contacts bearing signatures of the consumer as well as a payment history. Failure to do so means that the debt cannot be proven valid, thus cannot be reported to credit reporting agencies or attempt to be collected.

Considerations

A statute of limitations is the amount of time a creditor or debt collection agency has to legally collect a debt. The statute differs from one state to another. Once the statute of limitations has expired, the agency can no longer attempt to collect the debt; however, they can continue to report the unpaid debt on a credit report if they can provide the contractual proof that it is a valid debt.