Mortgage, Real Estate and Debt Information

It happens all the time. Debt collectors try to collect on debts that consumers have no knowledge of or never owed in the first place. So, what do you do when a bill collector demands payment in full on a debt that you never knew existed? You need to request a validation of debt.

A validation of debt is a request for proof that the collection agency that is contacting you owns the debt/or has been assigned the right to collect the debt on behalf of an original creditor. A validation of debt also includes a complete payment history, starting with the original creditor, and a copy of the original signed loan agreement or credit card application. This may be a debt you really owe or possibly a debt that was sent to collections by mistake. Either way, debt collectors can be very unapproachable. It is important to remember that you also have rights. According to the Fair Debt Collection Practices Act, Paragraph 809, - Validation of Debts:

"(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing:

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

The information presented in this article only covers some of the more important aspects of debt validation. It is important to do your research and fully understand your rights and obligations prior to attempting any type of communication with a debt collector.

If you're interested in doing the credit repair yourself, you'll want to be clear on a few of the basics.

One aspect you'll want to fully understand is the debt validation letter.

Its important to not only know what debt validation means, but also when to use it, how to use it, with whom to use it and why you'll be using it.

Lets start with what it means.

Debt validation means having the company trying to collect the debt provide proof that the debt is actually your responsibility and that they have the right to collect it.

You'll want to send a debt validation letter as soon as you hear from the collection agency. When you are contacted for the first time by a company claiming to own a debt they say you owe and insisting that you pay it immediately, get their mailing address and send them a validation letter whether you recognize the debt or not.

You'll want to make sure that your debt validation letter does not say you refuse to pay the debt. You also don't want it to say you will. Instead have it ask for specific proof that you are the party responsible for the debt.

You'll also want to make sure that it asks for substantial evidence that the particular company seeking to collect the debt has the legal authority to do so. Not only must they have proof from the original creditor that they purchased the debt, you'll also want them to provide proof that they have a right to try to collect the debt in your particular state.

An example of proper proof that the debt belongs to you, would be a copy of the unique agreement you made with the original creditor.

An example of proper proof that the particular company trying to collect the debt has authority to do so would be a copy of the receipt of your debt's purchase.

Knowing how to create a proper debt validation letter is one of the many tools you'll want to add to your toolbox, when a collection agency enters your life. For more free tools, visit http://www.help-with-credit-issues.com today and take back control.