Anyone planning to contest a debt that has been placed in collections ought to be aware of their obstacles, even if they have a case as strong as Gibraltar.
Debt collection in the United States is so large, only an absurd description can do it justice. Simply put, it’s humongous: 7,000 collection agencies, boasting a market value of $18. 8 billion, reap roughly $13. 4 billion annually.
The collections seas are frothy: Consumer Financial Protection Bureau (CFPB) received 70,348 complaints regarding debt collectors in 2021. Over the past ten years, the number has consistently increased annually, and it is by far the industry in which the bureau receives the most complaints regarding bill collection.
These figures will not shock anyone who has fallen badly in arrears in his/her accounts. Given that debt collectors can be obstinate and constantly present, they might be inclined to wonder, “What else is new?”
The Consumer Financial Protection Bureau (CFPB) recently updated its rules to include guidance for debt collectors who want to get in touch with you through social media, text messaging, and email. Yes, the person requesting to connect with you on Facebook, Twitter, or Instagram might be trying to collect a debt.
The first thing to do in the face of all this pressure is to not run away, especially if you have a valid grievance. Credit-tracing agencies are far from flawless. More than half of the complaints that were filed with the CFP in 2020–21 and 2020–20–01 came from customers who said they were contacted regarding debts they did not owe. This amounts to E2%80%94% of the complaints that were filed over the previous two years.
Ira Rheingold, a Washington-based lawyer who has over 20 years of experience in the debt collection industry as the executive director of the National Association of Consumer Advocates (NACA), has provided instructions on how to stop the collection calls. Answer the phone.
Rheingold says, “Pick it up and tell the person on the other end of the line: Stop calling me!” However, before you end the call, take note of their name and address, sit down, and write a letter politely asking them not to contact you. Send it by certified mail, return-receipt requested, so you have a record of this if it keeps going.
Now that this has become routine, Rheingold says, “the majority of complaints are from consumers who are being harassed for debt they don’t owe.” Rheingold appeared for an hour on CSPAN to talk about issues with debt collectors. “Collection agencies frequently use scant information to file lawsuits against the wrong person, harassing them or even suing them for an incorrect debt amount. ”.
Feeling overwhelmed by debt? You’re not alone. Millions of Americans struggle with debt, and navigating the complex world of debt collection can be daunting. But fear not! This guide will equip you with the knowledge and tools to effectively invalidate your debt and reclaim your financial freedom.
Let’s dive into the nitty-gritty of debt disputes and collection practices:
What is Debt Invalidation?
Debt invalidation is the process of challenging the legitimacy of a debt and ultimately getting it removed from your credit report. This can be achieved through various methods, including:
- Disputing the debt: This involves sending a written letter to the debt collector within 30 days of receiving the first collection notice, stating that you do not believe you owe the debt. The debt collector is then obligated to provide proof of the debt or cease collection efforts.
- Negotiating with the debt collector: You can attempt to negotiate a settlement with the debt collector, offering a lump sum payment in exchange for the debt being marked as “paid in full” on your credit report.
- Filing a lawsuit: In some cases, it may be necessary to file a lawsuit against the debt collector if they continue to harass you or attempt to collect on a debt you believe is invalid.
How to Dispute a Debt:
- Gather your evidence: Collect any documentation you have related to the debt, such as receipts, cancelled checks, or credit card statements.
- Write a dispute letter: Use the sample dispute letter provided by the Consumer Financial Protection Bureau (CFPB) as a template, and be sure to include all relevant details, such as your name, address, account number, and the reason for your dispute.
- Send the letter by certified mail: This will provide you with proof that the debt collector received your letter.
- Follow up: If you don’t hear back from the debt collector within 30 days, follow up with them in writing.
What to Do If You Already Paid the Debt:
If you believe you have already paid a debt that a debt collector is attempting to collect, you can provide them with proof of payment This could include cancelled checks, credit card statements, or a letter from the original creditor confirming that the debt has been paid.
What to Do If You Don’t Think You Owe the Debt:
If you don’t believe you owe the debt at all, you can dispute it with the debt collector. You should also check your credit report to see if the debt is listed. If it is, you can dispute it with the credit reporting agency.
Important Tips for Dealing with Debt Collectors:
- Keep detailed records: Keep track of all your communications with debt collectors, including dates, times, and the names of the people you spoke with.
- Don’t ignore debt collectors: Ignoring debt collectors will not make the problem go away. In fact, it could make it worse.
- Don’t admit to owing the debt: If you don’t believe you owe the debt, don’t admit to owing it. This could be used against you later.
- Get legal help if you need it: If you’re struggling to deal with debt collectors on your own, consider getting legal help.
Additional Resources:
- Consumer Financial Protection Bureau (CFPB): https://www.consumerfinance.gov/ask-cfpb/what-can-i-do-if-a-debt-collector-contacts-me-about-a-debt-i-already-paid-or-dont-think-i-owe-en-1403/
- Federal Trade Commission (FTC): https://consumer.ftc.gov/articles/debt-collection
- National Consumer Law Center (NCLC): https://www.nclc.org/
Remember, you have rights when it comes to debt collection. Don’t be afraid to exercise them. By taking action, you can invalidate your debt and get your financial life back on track.
Check Credit Reports Regularly
The majority of disputes with debt collection agencies stem from debts that customers don’t even owe, as Attorney Rheingold points out above. Collection agencies often rely on second or even third-hand information that is unreliable and unverified.
Regularly monitoring your credit report can help you identify issues early and take action to have them fixed before the debt even gets to the point where a collection agency gets involved.
“If a judgment goes against you, find a lawyer,” Rheingold adds. You have the opportunity to have it overturned if you act in this manner within 30 days and your attorney files a motion to reconsider. Making sure the debt collector has the information required to take the case to court is vital. He frequently works off a line of data that indicates the amount owed without providing any concrete evidence that you are the one who is responsible for the debt. ”.
Give up trying to handle things on your own if you are unable to stop the phone from ringing or your text alert from pinging. Instead, contact a nonprofit credit counseling agency, such as InCharge Debt Solutions.
As demonstrated above, it can be a laborious, time-consuming, and downright frustrating process to dispute a debt against collectors whose sole objective is to extract money from every customer on their list. With the knowledgeable, licensed counselors at InCharge Debt Solutions by your side, you can handle debt collectors and credit issues and be led — right now — toward unanticipated solutions.
Sample Letters to Dispute Debt
If the debt is legitimately yours, knowing whom to pay can be confusing. Debt collection agency? Original creditor? Debt that has slipped into arrears often changes hands, sometimes more than once.
There are basically three ways to pay collections, and customers might not know who to deal with or how much they are going to be paid.
A creditor may have an in-house collection division. In this case, you are still in debt to the original creditor and that is who gets paid.
Sometimes the creditor will hire a collection agency to chase the money for them. Ask the debt collector if they own the debt. If not, you still might be able to negotiate with the original creditor.
Often the last straw, the original creditor might sell the debt to a collection agency. In this case, the debt collector owns the debt, so any payment is made to the collection agency. (This amount, too, may be negotiable. ).
Debt Validation Letters: How to Use Them to Crush Debt Collection in 2024
FAQ
Does debt invalidation work?
How can I get my debt erased?
How can I get a collection removed without paying?
How long before a debt becomes uncollectible?
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State
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Written
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Oral
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Alaska
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6 years
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6
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Arizona
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5 years
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3
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Arkansas
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6 years
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3
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California
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4 years
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2
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What happens if a debt is invalidated?
If it is your debt, you will always still owe the money, but if the debt is invalidated, you won’t have to pay the obligation. Many debt collectors will have the opportunity to collect, and if they do not do so, the owner of the account will pull the debt from that agency and send it to a new agency for collection.
How do I request debt validation?
To request debt validation, you must send a written request to the debt collector within 30 days of being contacted by the collection agency. The answers to these frequently asked questions about debt validation will help you better understand the process. What is an initial communication?
What is debt invalidation?
Debt Invalidation is not a program, but instead a process that uses Federal and State consumer laws to make sure third-party debt collectors do not take advantage of you when collecting. Debt collectors often violate laws when attempting to collect, so our job is to protect your rights and to ensure you do not pay any debt that is not 100% valid.
What is debt validation?
Debt validation makes the debt purchaser or their debt collection agencies or attorneys prove they have the right to collect the debt they claim you owe. They not only have to show the amount they claim you owe is accurate but also provide all the documentation to prove they can legally collect as required by federal law.