Debt validation is a great credit repair tool and one of your rights under the Fair Debt Collection Practices Act (FDCPA). It allows you to demand proof from a collector that they have the legal right to collect the debt and a calculation of the amount that they claim you owe. If they cannot furnish the required documents they may even disappear from your life forever.
If you get a collection letter you must take action right away. The FDCPA gives you 30 days to exercise your right to validate the debt, but before you utilize this handy credit repair tool there are a couple of steps you must take beforehand.
Is the Debt Yours?
If you don’t recognize the debt you have the right to request that information from the creditor. As you examine your collection letter keep in mind that errors happen quite often in the collection business. There is some chance that the subject debt does not belong to you.
The Statute of Limitation
If you recognize the debt you should research the statute of limitation (SOL) before continuing your credit repair effort. The SOL is the length of time that a collector can sue your for the amount claimed. If the collector does try to take you to court for a debt that is beyond the SOL you can have the case dismissed. SOLs are state and debt type specific and can be found on the Internet. When you are calculating your SOL remember that the SOL clock starts from the first time you were delinquent, not the date of the chargeoff or the date that the collector first reported the debt to the credit bureaus.
Credit Repair Negotiation Options
If the debt is beyond the SOL you have a couple of excellent credit repair options. You may choose to ignore the debt until the reporting period expires and it falls from your credit report. Or you may decide to contact the collector to negotiate a settlement. If you really want to maximize your credit repair results you can negotiate for the complete removal of the account from your report.
Validate the Debt
If the debt is within the SOL it is time to put debt validation to work. Write a letter to the collector requesting the following information: proof of their legal right to collect, an accurate accounting of the amount, and a copy of the original account agreement or a signed copy of your original contract. As with all credit repair letters, keep it simple! Don’t tell your story; just ask for your validation.
If the collector is not able to validate the debt they are supposed to stop collection efforts and pull their reporting from the credit bureaus (if they have already reported). This wonderful credit repair result is common, but it may also happen that a collector furnishes very inadequate documentation and continues their collection efforts. They are in the wrong, but if you decide to fight them the battle may go all the way to court. If you do find yourself headed to court we suggest that you consult an attorney.
We Can Help
If you are in our credit repair program we will take care of all of these steps for you. Debt validation is part of our service. All you need to do is send us your collection notice as soon as you receive it and we will do the research, write and send the appropriate letters, and help you understand the process.