| By :
Jim Kemish
From Discomfort to Opportunity There is nothing pleasant about receiving a collection letter. But there is a powerful credit repair technique, known as debt validation, which can turn your discomfort into opportunity. Like most credit repair techniques debt validation should be done carefully and only in circumstances conducive to success. Your Rights Debt validation is the right to challenge a debt and receive written verification of a debt from a debt collector. This right is granted by the Fair Debt Collection Practices Act (FDCPA), Section 809. The intent of the law is to prevent errors in collection of debt, including billing the wrong person, the wrong amount, or for debt that has previously been paid. Timing Your Validation It is important to know that you only have 30 days to exercise the right to validate debt under the FDCPA. Practically speaking, collectors are sensitive to the 30 day time limit and if you ask for validation beyond the time limit it is highly likely that your request will be ignored. Avoiding Action Before attempting debt validation you should investigate the statute of limitation (SOL) on the debt and establish the extent of your legal exposure. The SOL is the length of time a collector can force the payment of a debt through the courts. Understanding SOL is helpful for all credit repair efforts, as beyond the SOL, a collector cannot sue you. Or if they do, you will prevail in court by claiming the SOL defense. State Differences The statute of limitation varies from state to state as well as by debt type, so you will have to research your specific SOL on the Internet. If the debt was incurred in a state other than that of your current residence, check both state SOL rules, as a collector may apply the one that is most favorable to their cause, i.e. the longer one. Settlement Opportunities The importance of knowing your SOL is considerable. Validating a debt that is beyond the SOL is not likely to set in motion unwanted legal activity, such as a lawsuit. Conversely, be aware that some collectors treat debt validation as a trigger for the intensification of collection efforts. Debt validation within the SOL is still a valuable credit repair technique, but you might chose to limit your efforts to debts that you are prepared to settle. Preparing Your Letter Once you have researched the SOL and decided to move forward, it is time to prepare your validation letter. Keep your letter as simple as possible. Like other credit repair communications, there is no benefit to sharing your life story. There is also no value, at least in your initial communication, in taking an aggressive stance. Be polite and ask them to validate the debt and provide a bulleted list of specific requests including documentation that the collector owns the debt and an accounting of the amount due. The Outcome of Validation Per the FDCPA, if the collector has not reported your debt to the credit bureaus they are not allowed to do so until they provide validation. And if have already reported and are unable to validate the debt they must cease collection efforts and stop reporting. Following Through Debt validation is a powerful credit repair tool which, in most cases will produce excellent results. But you should also be aware that legal precedent defining the obligations of the collector is inconsistent. As a result, some collectors will provide only minimal documentation and consider their job done. In addition, as there is no time limit for a collector to respond, you may occasionally need to press the issue. Copyright © 2010 James W. Kemish. All Content. All Rights Reserved.
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