When to Request Debt Validation From a Debt Collector
The debt validation and verification topic is deserving of much more time than I am going to give it in this post. I am covering this briefly due to the question I received yesterday after publishing part of our charge off series. where one of the bullet items states:
“Avoid some of the nut job advice on the internet about handling this stage of collection”
Requesting validation of debt is a consumers right under the Fair Debt Collection Practices Act (FDCPA). More specifically section 1692g of the Act.
Debt validation requests have absolute applicability in many circumstances. You have the right to ask that a debt be validated if you do not think you owe it, or the amount asserted as due and owing is in question. In fact, your right to dispute a debt and request it be validated is required to be spelled out to you in virtually every debt collection letter you may receive from a collection company. That makes it pretty damn important!
I do not disagree with those who point to the importance of it. I absolutely disagree with nut jobs on the internet who wax on and on about how you should always request validation NO MATTER WHAT !
Debt validation requests when you want to resolve a debt.
Don’t send debt validation letters to debt collectors when you are really just trying settle or pay. It can back fire. Let me be clear here; I am talking about a person who wants to RESOLVE a debt placed with a debt collection agency after charge off, and who knows they legitimately owe the debt.
When sending in a debt validation request in response to a dunning letter you receive from a debt collector, who is simply an assignee of your creditor, you may see your file get immediately kicked back to the creditor. Your creditor may then decide to escalate your account for more aggressive action such as placing the account with a debt collection law firm, which can then lead to you being sued in order to get you to pay credit card debt and other loans.
See, it backfires. Not all the time, but do you take that chance if all you want to do is get the debt behind you and move on with your life? Settling the debt while it is with the debt collection agency would allow you to put the matter to rest.
I should point out that requesting debt validation can be a useful tool when navigating tough financial times. For someone who cannot access the needed money, or commit to a payment plan due to limited resources, or who does not want to file bankruptcy, or needs to delay filing for some reason, debt validation has its place. Also, disputing a debt or requesting validation has great applicability when dealing with a debt buyer.
Consumer advocate organizations have been vocal about the need for the Fair Debt Collection laws to be updated. The FTC announced the need to update the law. The FTC effectively subpoenaed the largest debt buyers in the nation earlier this year. Collection laws and practices are being looked at in detail. This scrutiny will almost certainly result in changes to the 30 plus year old consumer protection law, bringing it current with the realities of today’s society and advances in technology. I will go out on a limb and suggest that changes to federal debt collection laws will lead to changes in how debts are assigned and what information gets passed on to a debt buyer. As a result, debt buyers will more readily be able to validate debts upon request.
Post any questions or concerns you have with debt validation in the comments below for feedback.
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Michael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.
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Just received a letter from 3rd party, my debt was initially with Bank of America. I have 30 days to request validation. There is a box on the letter stating If unable to pay balance in full, contact our office for payment options which may be available to you. I paid on time until I was laid off. My spouse has a incurable cancer and have lots of medical bill. I don’t want a judgment, but not sure what to do. Call and see what the payment options are, consult a debt counseling agency. Also should I request validation letter, amount owed seems high.
Michael Bovee says
Who is the collection from? What is the balance owed today? When did you stop paying BofA? What state are you in? Is your primary goal to resolve the debt through payments or settle if the deal is good enough?
Michael Bovee says
What state are you in? It helps when I know the SOL to sue legitimately has passed.
I’m a post-grad student who was reliant on student loans to stay afloat, but they also paid my bills. Credit cards I had provided income for the necessities of my unpaid internships.
During this time, I had two major losses of immediate family members, my father and grandmother. Following their deaths, my grief literally put me into my current predicament. My struggle with depression caused by the grief set me onto the path that these credit cards weren’t getting paid.
I believe I have 4 debts I’m WANTING to resolve. I was temporarily employed but my depression really interfered with my functioning, and I was not in a state of mind that kept me successful. I needed to grieve. I have medical verification if needed, to verify the impairment.
Now, rising above it all… I’m pissed at my self and want to resolve these matters. I’m confused on how I should approach this, within my rights. I do not have the resources at this time to fully pay off each debt but I want to make a plan.
What should those steps be… I’ve read up on my rights re: how aggressive it can get. I’ve received a lot of phone calls.
My next intuitive actions I will take will consist of:
1. Review each debt online, via statement and understand how much I owe per credit card;
2. Call the collections agency or the credit card company?
3. Attempt to see if I can resolve the debts with each creditor?
4. Or, call the collection agency to request a letter/document with the debt information?
5. What about the fees they throw on to the debt I’m being collected, for?
I want to learn this hard lesson now and never fall back to this ever again. My anxiety is high and it feels scary but I need to make and take the actions steps… but, in the right way & ensuring I am not being blind-sided.