Below you will find an example of a debt validation letter. You can use this letter as is, simply change the relevant details. Your debt validation letter should be sent by certified mail with return receipt requested.
This way you’ll have evidence the collection agency received your validation request. They’re required to respond within 30 days of receipt. It is not unheard of for collection agencies to ignore debt validation requests.
Many debt collectors have been fined by the Federal Trade Commission (FTC) for such violations. It is your legal right to request that your collection account is validated according to the Fair Debt Collection Practices Act (FDCPA) a federal law passed by Congress.
Sample Debt Validation Letter
Your city, state, and zip code
Name of the collection agency
Collection agency street address
City, state, and zip code
Attn. name of collection agency:
In accordance with my rights under the Fair Debt Collection Practices Act, I am hereby requesting formal validation of the alleged debt you are reporting to the major credit reporting agencies on my behalf. Please note that I am not requesting a simple account summary but instead you should forward the following information in a timely manner:
1. Validation that the alleged debt was established, including a signed application for credit.
2. Formal certification that the alleged debt was transferred to a third party if applicable.
3. Notarization regarding the alleged debt’s P&L application to federal or state tax write off.
4. A complete monthly accounting history from the alleged debt’s inception through the present date, including any alleged charges, penalties, service charges, and payments, as well as a certified attestation regarding current status.
5. Documentation regarding your company’s compliance, including applicable bond, regarding debt collection laws in my state.
I will look forward to receiving the requested documentation so that this matter will not escalate further. Otherwise, you are prevented from reporting this account to the consumer reporting agencies. Any further reporting is in violation of the Fair Debt Collection Practices Act (FDCPA) section 809 (b) 15 USC 1692g.
Your printed name
It is very common for collection agencies to either not have the necessary documentation to validate your debt, or just not want to spend the man-hours and time jumping through the hoops to validate your account. If this is the result then you are not responsible for paying off debt in collections.
In other words, the debt is legally forgiven. And they’re supposed to contact all three credit bureaus to have them start getting collections removed from credit report files, regarding this account.
If they do validate your debt, the next step is to check the statute of limitations. This is the legal time window for which you’re responsible for repayment. Generally, this is about seven years from the first date of delinquency. Please, investigate your local legislation as this is a state law, and does vary.
The statute of limitations applies to the vast majority of types of consumer debts, from charge off credit card accounts to medical bills, utilities, telecommunications, loans, and many more. The only two exemptions are defaulted federal student loans, and federal income taxes.
Warning, one of the sneakiest and often illegal collection tactics is to re-age consumer accounts. This enables the collection agency to continue to attempt to collect payment, and is another common cause for the FTC and Consumer Financial Protection Bureau (CFPB) to fine debt collectors.
Only if your account is valid, and within the statute of limitations, should you then negotiate a settlement. And when it comes to exactly how to pay off collections, it’s vital that you settle your debt for less than the total balance. Often collection agencies will accept payment in the ballpark of 15% to 45% of the total balance.
For example, with a $1,000 debt, you may be able to settle for just 20% or $200. And it’s mission critical that as part of your settlement agreement you get the collection agency to agree that in exchange for your payment, they’ll stop reporting your account information to all three credit bureaus.
If you overlook this part of your agreement, the only thing that happens when you make payment, is the status of the collection on your credit report will be changed to a paid collection. This is still a negative item, and it’ll cause you to have a bad credit rating. We must remove this item entirely from your credit reports, in order to fix credit.
We suggest you get this agreement in writing, and we would also encourage you to add this stipulation into the memo line on a personal check as an added insurance policy that they’ll stop reporting your account information to the credit bureaus. Because when they deposit and cash the check, that will be legal evidence of your contract.
The next step is to work on clearing this item from your credit reports. And you’ll need to exercise more of your rights as a consumer, specifically those granted by the Fair Credit Reporting Act (FCRA). This federal legislation enables you to challenge and dispute credit report items, so long as you believe they’re made in error, misleading, or inaccurate.
Naturally, we’re going to dispute the collection item on your credit report. You can file your dispute online, over the phone, and by mail. Once the credit bureaus receive your dispute and deem it valid, they’re required to investigate the item.
During which they’ll contact the collection agency, and request they verify the account, and the relevant information. As per your settlement agreement, the collection agency won’t verify your account with the credit bureaus.
And in compliance with the FCRA, the credit bureaus will have to remove this item from your credit reports. This is how to get collections off your credit report, and any negative item, and to do so legally.
Please, be very cautious when dealing with debt collectors, often they’ll view even acknowledgement of your account, if you were to call in for example, as account activity. And try to re-age your debt, as a result. It’s a dangerous game, that almost always comes at the expense of consumer’s.
In sum, your credit score is a lot like your Grade Point Average (GPA) in school days past. It doesn’t matter if you’re acing all your courses, if you’re failing underwater basket weaving, because this one negative mark will ruin your overall GPA. This is also true of your credit score.
FICO is very open and clear about this, and they say a collection on your credit report can damage and drag your score down by up to 100 points. This is why it’s so important to clear credit report dings, blemishes, and remove any negative items. We encourage our members to consider professional, legal, and legitimate credit repair companies to help.
Because in 2016 alone, over 9 million negative items were removed from consumer’s credit reports. One of the best firms is The Credit Pros. They’ve helped client’s successfully remove collections, late payments, charge offs, judgements, liens, and many more negative credit report items.
Get a free credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596. And for more tips, techniques, and strategies about how to fix my credit score with Dan Willis, sign up for our free newsletter and join our congregation.
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