Debt Validation Letter - How to Validate a Debt

How to validate a debt - debt validation letter
Key Takeaways:
  • When a debt collector contacts you, respond within 30 days or they may assume the debt is legitimate.
  • How you respond can be the key to how much you end up having to pay.
  • The best way to start is by asking the debt collector to legally validate the debt.

Having a debt collector contact you can be upsetting. A debt collector may try to scare you into making a payment right away. Don’t let them throw you off your game. You have rights.

The best way to take control of the situation is to start by getting the facts straight. Before you discuss the debt or make any payment, you should first confirm that the claim is legitimate and accurate.

Validating the debt is a way for you to protect your rights. Here’s how you can do it. 

What is a debt validation letter?

A debt validation letter is a formal notice from a debt collector. By law, it is required to spell out certain details about the debt the collector claims you owe. 

When someone approaches you for payment of a debt, it is very important to get the details before deciding what to do. Before you have had a chance to review a debt validation letter, do not say or do anything to agree that you owe the money. The debt validation letter can help you confirm that the debt is accurate and owed by you. 

Debt collectors make money by collecting as much as they can, as quickly as they can. So, they may attempt to bully you into making a payment quickly, before you’ve had a chance to get all the facts straight. 

This is where your rights under the Federal Debt Collection Practices Act (FDCPA) kick in. That’s a federal law that governs how debts are collected. A debt collector is required to provide details about your debt. They are also required to give you 30 days to dispute any of the information they send you.

When you are contacted by a debt collector, don’t ignore them. The way to take control of the process is to request a debt validation letter. This will give you a clearer picture of the situation.

What must a debt validation letter include?

To be legitimate, the debt validation letter you receive must include the following:

  • Name of the creditor. The company contacting you about the debt may be a third-party debt collector that you have never heard of. Getting the name of the creditor can help you figure out if you really owe the debt. It’s possible that the creditor may be different from the original lender if the debt has been sold to someone else, but you should be told where the debt came from. 

  • The amount owed. Check this figure against your own records if you have any. Interest charges and late penalties may have added to the amount you originally borrowed. 

  • Acknowledgement of your rights under the FDCPA. You should be notified that you have thirty days to respond by disputing the debt or by requesting additional information.

The debt collector’s first contact with you might include all of this information, which means you won’t need to request it.

Why do you need a debt validation letter?

A debt validation letter helps you take control of the situation by giving you 30 days to figure out how to respond. During that time, the debt collector must provide you with any relevant information you request. Until they’ve given you that information, they are forbidden from continuing to contact you about the debt.

A debt validation letter will help you check the basic facts about the debt they claim you owe. Those facts boil down to the following:

  • Who you owe money to. Information about the connection between the original lender and the party trying to collect money from you.

  • What you owe. What’s included in the amount they claim you owe. That means explaining any interest and other charges that have been added to the original debt. This figure should also reflect how payments have been subtracted from the amount owed.

  • When the debt was taken out. The statute of limitations is the law in your state that limits the amount of time someone has to collect a debt from you. If your debt is past the statute of limitations (generally 4 to 7 years), the creditor may no longer take any legal action to collect the debt. Be careful, though. If you make a partial payment or even acknowledge the debt verbally, you might start the statute of limitations all over again. 

How to validate debt - 3 steps

Your legal rights depend on your timely response. Here are three things you should do to validate your debt. 

  • Step 1: Respond to the debt collector quickly

  • Step 2: Make the debt verification request in writing

  • Step 3: Send the debt verification request with tracking

1. Respond to the debt collector quickly

The law gives you the right to receive information and time to think about your response. However, your rights depend on responding within 30 days. 

Responding is not the same thing as acknowledging or paying the debt. You can respond by sending a debt verification letter, which is a request for additional information. A debt verification letter buys you time while you get the information you need to figure out whether the claim is legitimate and whether you are legally obligated to pay.

The key is to request debt verification within 30 days. If you fail to respond within that time, the creditor is entitled to assume that the debt is valid. 

2. Make the debt verification request in writing

Your debt verification letter can request written documentation of any the following items. This list may seem like a lot to deal with, but remember, these are just requests for information. It’s the debt collector’s job to provide answers to your requests. Simply copy anything from the list that you think might apply to your situation, and include those items in your request for debt verification. 

  • The name and address of the creditor.

  • The account number of the loan or credit card on which the debt is owed.

  • The amount owed.

  • The name and address of the original creditor, if different from the current creditor.

  • The account number at the original creditor on which the debt was incurred.

  • Documentation of the transfer of the debt from the original creditor to the current one.

  • A copy of the original agreement that created the debt.

  • If you are not the original borrower, documentation of who was and why you should be expected to pay the debt.

  • A copy of the last billing statement sent by the original creditor.

  • If the debt has been transferred to another creditor, the date of that transfer and the amount transferred.

  • An itemized list of any interest, fees, and other charges added to the original amount owed. This list should show the date and amount of each addition, along with an explanation of how these were calculated. 

  • An itemized list of payments to the account, including dates, amounts, and the resulting reduction in the amount owed.

  • Dates for when the creditor claims the amount owed was due, and when it became delinquent.

  • A date for when the debt collector believes the statute of limitations for this debt will expire, and their basis for determining that date.

  • Information on the debt collector’s licensing in your state. This should include the name of the organization to which the license was issued, the license number, and the name, address, and phone number of the state agency that issued the license. 

  • A request for an offer of an amount the creditor would accept to settle the debt, if they will accept less than the full amount owed in order to get payment sooner.

3. Send the debt verification request with tracking

When you send your request for more information, keep a copy of your letter. If you send it by mail, request a confirmation of receipt. 

You may also want to send a copy of your letter by email. This will speed your response and may give you another way to confirm that the debt collector has received your request. 

What happens after you get a debt validation letter?

Once the debt collector validates the debt and answers the questions in your debt verification letter, you have 30 days to make a decision about what to do next. 

The three main choices you have are:

  • Pay what you owe. If you think the claim is legitimate and can afford to pay it, you may want to pay the debt. This will save you from further collection activities for this debt, including a lawsuit and potential judgment against you. Paying the debt will also allow you to avoid the potential for further damage to your credit.

  • Fight the claim. If you think the claim is not legitimate, you may dispute it. If the debt is large, this may mean defending yourself in a lawsuit. You should consider getting legal advice before fighting a claim. If you can’t afford an attorney or don’t know how to find one, look for a Legal Aid society in your area that can help.

Make a settlement offer. By the time a debt has been referred for collection, creditors are often willing to take less than the full amount owed. You can try making an offer yourself or work with a professional debt resolution specialist to do so.

Frequently Asked Questions

What is the FDCPA?

The FDCPA is the Fair Debt Collection Practices Act. This is a federal law that governs how a debt collector can communicate with you about a debt. It prohibits debt collectors from harassing or threatening people in their efforts to collect money. For example, debt collectors may not contact you more than seven times within a seven-day period. They are required to provide information about the debt they claim you owe, and they may not continue to contact you until they’ve provided that information. 

What is the difference between a debt verification letter and a debt validation letter?

A debt validation letter gives the basic facts about the debt in question — how much it is, when it was incurred, and who the creditor is. A debt verification letter is more detailed correspondence between the consumer and the debt collector. Your letter can request things like account numbers and details on how additional charges to the account, like interest and fees, were calculated. The debt collector must answer those questions.

How long do debt collectors take to respond to debt validation letters?

Under the terms of the FDCPA, debt collectors have 5 days from their initial communication with you to provide basic debt validation information. They may take longer than that to reply to more detailed debt verification requests. While there is no time limit for when they must respond to those requests, they are not allowed to continue collection activities until they respond.