Debt Validation - A Powerful Tool
Have you received a collection letter? The law provides consumers with a powerful tool for dealing with collectors. Credit repair expert Jim Kemish explains the power of debt validation and how to use it to your benefit.
The Letter of the Law
The correct way to respond to a collection letter is with a written request for debt validation. This is your right under the Fair Debt Collection Practices Act (FDCPA), and if done in a timely and correct manner can produce fantastic results. Let’s start with the law: FDCPA § 809. Validation of debts [15 USC 1692g (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.”
Timing is Everything
Please note that there is only a 30 day window of opportunity to request your debt validation. Collectors must abide by the laws spelled out in the FDCPA, but these laws only mandate a response for the 30 days following the date of the initial collection letter. Beyond the 30 day window collectors have no obligation to provide the documents that you request and you have lost the opportunity to force compliance. Don’t procrastinate. Your credit is too important.
Why Validate the Debt?
Why request validation of a debt? There are two good reasons that you should request debt validation on every collection letter you receive, even if it looks legitimate. First, how do you know that the collector has the legal right to collect? You don’t! Debt is regularly sold, and just as often re-sold. You may have incurred an obligation with the original creditor, but you don’t know anything about the party that is currently demanding payment. So exercise your rights and ask them to prove that they own the debt. Secondly, how do you know that the amount of the debt is correct? Is the interest calculated properly? Are there other fees added? You deserve to know. As with any other credit repair tool, it’s about exercising your rights!
The Debt Validation Letter
Let’s get to work. Write a letter to the collector. Make it neat. Reference the debt using the identification they provided in the collection letter, such as collector account number, creditor account number, creditor name, etc. Clearly state that you dispute the collection and that according to the FDCPA you demand that the collector provide proof that they own the debt and have the right to collect, as well as proof of the amount owed by providing a copy of your signed credit agreement with the original creditor and a complete accounting of amount in question. Attach a copy of the collection letter, and send it certified mail. If you are not comfortable doing this yourself contact a reputable credit repair company. Most legitimate credit repair businesses offer debt validation as part of their arsenal and will be happy to do this for you.
The Response
What happens next? Once you have sent a debt validation letter to a collector they must satisfy your request with adequate documentation. Ownership of debt may be proven with a contract or purchase agreement transferring the debt to them. The amount owed may be documented with account statements from the original creditor, or a copy of the original signed loan agreement and an accounting of the total. It is never sufficient for the collector to provide their own internal itemization of the debt. In all cases, the documentation should be clear and provide definitive proof of the collectors claim.
Say Goodbye to the Collector
What happens if the collector cannot (or does not wish to) provide the documentation that you request? If they can’t comply …they can’t collect, they can’t contact you, and they can’t report the collection to the credit bureaus. It’s that simple. And it is likely that you will never hear from them again.
An Important Note
Our credit repair clients occasionally express concern that if the collector is pushed too hard they will send a summons and attempt to get a judgment. It is not legal for a collector to take any additional steps to collect, including getting a judgment, until they have satisfied their obligation under the FDCPA. If you receive a summons after challenging a collector with a debt validation letter you will need to appear in court with proof that you requested validation. Going to court is not an attractive option, but if you kept proper records and appear with your certified mail receipt you will prevail.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Tuesday, January 15, 2008
Thursday, January 3, 2008
Credit Repair: Don’t Miss This Opportunity!
It's easy!
Credit repair offers an opportunity to improve your credit scores and save significant dollars each month. The process does not have to be complicated. If you are organized and have an understanding of the basics you can succeed!
Include Yourself
It is important to understand how widespread credit reporting errors are. Over 200 million Americans have credit files with each of the three credit bureaus, and 150 million of those people have errors on their credit reports. If you are in this category there is a strong possibility that these errors are having a significant impact on your credit scores and causing you to pay higher interest rates on your loans and credit cards than you should. These premium interest rates may be costing you hundreds of extra dollars per month.
It’s Your Right!
Millions of people miss out on the opportunity to improve their credit scores and save money because they are afraid to look at their credit reports. Or they believe that their low credit scores are probably correct because they were late on their payments in the past. This is a mistake. Don’t imagine that your old credit problems bar you from challenging questionable information on your reports.
Invisible Errors May Cost You Thousands
Credit reporting errors are not always easy to spot. Most people scan their reports for obvious errors, such as derogatory accounts that do not belong to them, or inaccurate late payments. It is important to locate these obvious problems, but there are other errors that may have an even greater impact on your scores, and these errors may be entirely invisible. Duplicate accounts, understated high credit limits, misreported account opening dates, non-derogatory accounts that do not belong to you - but overstate your liabilities, and even the absence of accounts that should be reporting, are all in this category. In addition there are accounts that, although correct, should not be on your reports because they are past the statute of limitation. When you add them together these invisible errors may be having a major effect on your scores and the interest rates that you are paying on every dollar you borrow.
Help Yourself Starting Today
Don’t let another day pass without taking action. Order your credit reports today. Make sure to order all three reports. Each bureau is somewhat different and will contain unique errors. There are no short cuts. Once you have your reports go through each one line-by-line. You might want to have a yellow highlighter and a pad of paper handy to make notes. If you find anything even slightly questionable I suggest that you give yourself the benefit of the doubt and add it to the list of items to be disputed. We are very clear about this with our credit repair clients; it is not enough that something seems familiar. If it is not definitely correct, you have the right to challenge it. And you should exercise your rights.
For Disputes Less is More
The credit bureaus process millions of dispute requests each month. Your letter will be read by a clerk that is trained to identify the nature of your dispute. No matter what you write, the clerk’s job is to identify the most basic issue and get the data into the computer as quickly as possible. There is no benefit to writing a story. If the account is not yours, say that the account is not yours. If you were never late, say that you were never late. Be clear and simple. If you stray from simplicity you take the risk that your dispute will be misinterpreted or labeled as frivolous and ignored.
When in Doubt Talk to a Pro
If the credit repair process is too time consuming, or you can’t make sense out of it, you should consult a credit repair professional. Your credit is too important to ignore. Credit repair professionals have a comfort level with the credit reporting system that comes from extensive experience. Generally, their familiarity with the process will give you an edge in dealing with the bureaus. The professional edge may make the difference between average results and great results, and that may mean a lot.
The End Result
The better your credit scores the lower the rate you will pay on the money you borrow. This includes your mortgage, your auto loans, your credit cards, and more. Everyone’s situation is different, but in our experience a careful review and clean-up of your reports can have a dramatic impact on your credit scores. Make the effort. Don’t miss the opportunity.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Credit repair offers an opportunity to improve your credit scores and save significant dollars each month. The process does not have to be complicated. If you are organized and have an understanding of the basics you can succeed!
Include Yourself
It is important to understand how widespread credit reporting errors are. Over 200 million Americans have credit files with each of the three credit bureaus, and 150 million of those people have errors on their credit reports. If you are in this category there is a strong possibility that these errors are having a significant impact on your credit scores and causing you to pay higher interest rates on your loans and credit cards than you should. These premium interest rates may be costing you hundreds of extra dollars per month.
It’s Your Right!
Millions of people miss out on the opportunity to improve their credit scores and save money because they are afraid to look at their credit reports. Or they believe that their low credit scores are probably correct because they were late on their payments in the past. This is a mistake. Don’t imagine that your old credit problems bar you from challenging questionable information on your reports.
Invisible Errors May Cost You Thousands
Credit reporting errors are not always easy to spot. Most people scan their reports for obvious errors, such as derogatory accounts that do not belong to them, or inaccurate late payments. It is important to locate these obvious problems, but there are other errors that may have an even greater impact on your scores, and these errors may be entirely invisible. Duplicate accounts, understated high credit limits, misreported account opening dates, non-derogatory accounts that do not belong to you - but overstate your liabilities, and even the absence of accounts that should be reporting, are all in this category. In addition there are accounts that, although correct, should not be on your reports because they are past the statute of limitation. When you add them together these invisible errors may be having a major effect on your scores and the interest rates that you are paying on every dollar you borrow.
Help Yourself Starting Today
Don’t let another day pass without taking action. Order your credit reports today. Make sure to order all three reports. Each bureau is somewhat different and will contain unique errors. There are no short cuts. Once you have your reports go through each one line-by-line. You might want to have a yellow highlighter and a pad of paper handy to make notes. If you find anything even slightly questionable I suggest that you give yourself the benefit of the doubt and add it to the list of items to be disputed. We are very clear about this with our credit repair clients; it is not enough that something seems familiar. If it is not definitely correct, you have the right to challenge it. And you should exercise your rights.
For Disputes Less is More
The credit bureaus process millions of dispute requests each month. Your letter will be read by a clerk that is trained to identify the nature of your dispute. No matter what you write, the clerk’s job is to identify the most basic issue and get the data into the computer as quickly as possible. There is no benefit to writing a story. If the account is not yours, say that the account is not yours. If you were never late, say that you were never late. Be clear and simple. If you stray from simplicity you take the risk that your dispute will be misinterpreted or labeled as frivolous and ignored.
When in Doubt Talk to a Pro
If the credit repair process is too time consuming, or you can’t make sense out of it, you should consult a credit repair professional. Your credit is too important to ignore. Credit repair professionals have a comfort level with the credit reporting system that comes from extensive experience. Generally, their familiarity with the process will give you an edge in dealing with the bureaus. The professional edge may make the difference between average results and great results, and that may mean a lot.
The End Result
The better your credit scores the lower the rate you will pay on the money you borrow. This includes your mortgage, your auto loans, your credit cards, and more. Everyone’s situation is different, but in our experience a careful review and clean-up of your reports can have a dramatic impact on your credit scores. Make the effort. Don’t miss the opportunity.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
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