Debt Validation Letter: How to Validate a Debt

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, starting with the right to request a debt validation letter.

A good first step is to get the facts straight before you take action. Before you discuss the debt or make any payment, you should first confirm that the claim is legitimate and accurate.

A debt validation letter helps protect your rights. Here's how to request one.

What Is a Debt Validation Letter?

A debt validation letter is a formal notice from a debt collector. By law, the letter must spell out certain details about the debt the collector claims you owe. Debt collectors are supposed to send you a debt validation letter (also called a debt validation notice) within five days of contacting you about a debt.

When someone approaches you for payment, get the details in writing before you decide 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. A debt validation letter helps confirm that the debt is accurate and owed by you.

Debt collectors make money by collecting as much as possible, as quickly as possible. They may call repeatedly and try to pressure you into a quick payment before you have all the facts.

This is where your rights under the Fair 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, and don't agree to anything based on a phone conversation. A way to take control of the process is to request a debt validation letter. This may give you a clearer picture of the situation. If the debt turns out to be valid and unaffordable, debt settlement is one option worth exploring.

What Is the Difference Between a Debt Verification Letter and a Debt Validation Letter?

A debt verification letter is sent from the debtor (you) to the debt collector in response to the debt validation letter. In a debt verification letter, you may request that the debt collector provide additional information to verify that the debt is valid. A debt verification letter asks the debt collector for basic details such as the amount owed, the original creditor, and the date the debt was incurred.

A debt validation letter comes from the debt collector and provides detailed information about the debt, including why the collector has the right to collect the money from you. This should include account numbers and documentation of the debt. The letter should show how fees and interest were calculated.

You have the right to send a debt verification letter within 30 days of a debt collector's first contact. Once the debt collector receives your verification request, they are required to pause collections activities until they respond. Send your debt verification letter within the first 30 days to protect your rights under the FDCPA. If the collector is unable to verify the debt, they must stop their collection efforts. That could protect you from debts you don't owe or from fraudulent claims.

Why you might need a debt verification letter

A debt collector might call about an old balance you barely remember, one you already repaid, or one that isn't even yours—a case of mistaken identity or a mix-up with similar names.

In these situations, a debt verification letter helps you get answers and defend your rights.

A debt verification letter is a formal request for details about the debt in question. The law requires collectors to prove that the debt is real and that they have the right to collect it.

Details debt collectors are required to provide include:

• Name of the creditor.

• Contact information for the creditor.

• Account number associated with the debt.

• Itemization of the amount owed, reflecting the original amount plus any interest, fees, and payment history.

A debt verification letter has an additional benefit. The debt collector has to stop collection efforts until they've provided the information you've requested. This may give you a chance to check your records and research whether you have grounds to dispute the debt.

These details may protect you from scams, errors, or unfair collection practices, and clarify your options before you act. A debt verification letter is a powerful first step toward taking control of the situation.

Debt verification matters even more for older debt. Every state sets a statute of limitations on debt collection lawsuits. Once that deadline passes, the law no longer allows a creditor to win a lawsuit over the debt, though they may still try. A debt verification letter may reveal the age of a debt, which could help you decide how to handle the situation.

What must a debt validation letter include?

To be legitimate, a debt validation notice must include:

• A statement that the notice is from a debt collector.

• Your name and mailing information, along with the debt collector's name and mailing information.

• The name of the creditor you owe the debt to (there may be more than one).

• The account number associated with the debt, if there is one.

• An itemization of the current amount of the debt, reflecting interest, fees, payments, and credits since a specific date.

• The current amount of the debt as of the date the notice was provided.

• Instructions for replying to the debt collector if you dispute the debt or the amount.

• An end date for the 30-day period you have to dispute the debt.

The debt collector's first contact with you might include all of this information, which means you should not need to request it. Even if you receive an accurate, complete debt validation notice from a debt collector, you may still send a debt verification letter to ask for additional details about the debt.

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. Your rights depend on responding within 30 days. A response is not the same thing as acknowledging or paying the debt. You may respond with a debt verification letter, a written 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.

Do not send payment or agree to a new payment plan while your verification request is pending. A payment, or a promise to pay, could be treated as acceptance of the debt, even if it turns out to be inaccurate.

2. Make the debt verification request in writing

Your debt verification letter may request written documentation of any of the following items. The debt collector must provide answers to your requests. Copy anything from the list that applies 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 would 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 may 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 to make a decision about what to do next.

The three main choices you have are:

• Pay what you owe. If you think the debt is legitimate and affordable for you, paying may be the right choice. Full payment avoids further collection activity for the debt, including a lawsuit or judgment, and protects your credit from additional damage.

• Fight the claim. If you think the debt collector's claim is not legitimate, you may dispute it. If the debt is large, you may need to defend yourself in a lawsuit. Consider legal advice before you fight a claim. If an attorney isn't affordable or you don't know how to find one, a Legal Aid society in your area may provide free legal help.

• Make a settlement offer. By the time a debt has been referred for collection, creditors are often willing to accept less than the full amount owed. You may try to negotiate an offer directly or work with a professional debt settlement company that specializes in unsecured debt, like credit card balances. Debt settlement may negatively impact your credit.

If a debt collector doesn't respond to your written dispute or continues trying to collect before providing the required verification, you can file a complaint with the Consumer Financial Protection Bureau.