What is debt validation?
Debt validation is a process by means of which the collection agency substantiates that you have taken a loan from them, which you haven’t repaid. This process is extremely significant, because when the third-party debt collectors contact customers, they normally don’t possess proper, legitimate credentials to support their accusation that you are indebted to them. To save yourself from the wrong charges of a third-party debt collector you need to appeal for a debt validation.
Why sending a debt validation or DV to the collection agencies?
As per the centralized Fair Debt Collection Practices Act (FDCPA), once a collection agency contacts you, it has to mail you a notice in black and white, mentioning the creditor’s name, the outstanding amount that you need to pay as well as your rights to challenge the debt. By sending a debt validation letter to the collection agency, through certified mail, you are challenging the agency to provide evidence that you are indebted to them. This process helps to find out whether the claims made by a debt agency are genuine or not.
What is the correct way to validate debt?
There is a particular procedure, which you need to stick to in order to validate debt.
Firstly, you need to ignore the credit report notice, which states that you only have 30 days in hand to challenge the debt. However, such an announcement does not imply that the courts and the credit bureaus will consider your debt to be valid, in case you fail to file the dispute, within the specified time. It actually suggests that after 30 days, if the debt collection agency doesn’t receive a reply from you then it will consider the debt to be valid. In reality you can legally challenge a debt whenever you want.
Secondly, you need to type your validation letter. In the letter, ask for written evidence to prove that you owe the debt, the original creditor’s name, as well as license proof of the collection agency.
Never include your signature or Social Security number in your letter. Collection agency can use such vital information in validating the debt.
Thirdly, you need to forward your debt validation letter through Certified Mail: Return Receipt Requested. Keep your return receipt carefully as it will act as evidence that your letter was delivered.
Fourthly, hang on for a reply. As per the FDCPA, a debt collection agency needs to authenticate your debt prior to resuming collection activity.
Fifthly, verify the validation if it arrives. If you are still have doubts then you should mail a second debt validation letter.
Usually how many days it might take a Collect Agency (CA) to respond to a DV letter?
In reality, there is no specified time limit as to when a debt collection agency should reply to a DV letter. It might take 30 days or can even take more than 75 days to respond.
What can I do when I really do not have money to pay them?
If you fail to pay the Collect Agency then it might sue you. Under such circumstances, you need to attend the court. If you are not able to explain the state of affairs and suffer defeat in the case, then you might get charged for bankruptcy. At times, you might be granted a verdict where your salary will be used to repay your debt.