Debt Validation: The most important instrument against creditors and collection agencies.

Debt validation refers to the debtor’s right to challenge the debt which the original creditor or the collection agency is asking him to repay. Whenever, a creditor or a collection agency calls you up over phone to repay a debt, he should send a debt validation notice to the debtor within five days from the date of first communication. However, if the first communication is in writing, the letter which is sent to the debtor includes a debt validation notice. This debt validation notice is send to the debtor as per the rules of the Fair Debt Collection Practices Act, and is intended to let the debtor know his right to dispute the validity of the debt within 30 days of the date of communication.

You should dispute the debt in writing within 30 days from the date of first communication else the debt is accepted to be valid and the collection agency or the original creditor can take steps to recover the debt from you. However, if you validate the debt within 30 days from the date of communication, the collection agency or the original creditor must send you proper validation of the debt within 30 days from the date of receipt of your debt validation letter else the collection agency must cease collection of the debt. After receiving your request for debt validation, the collection agency must send you the proof that the debt has been sold off to him by the original creditor and presently he owes the debt.

Debt validation letter can also be send to the collection agency if you find the name of the collection agency listed in your credit report against some debt. In such case also, the collection agency must send the validation within 30 days from the date of receipt of your debt validation letter. However, if they do not validate your debt within this period, you can send dispute letters to the credit bureaus asking them to remove the listing from your credit report.

It is always advisable to send all debt validation requests in writing and under certified mail with return receipt requested, to keep a record in case the collection agency or the original creditor later does not acknowledge the acceptance of your debt validation letter. This return receipt may strengthen your case if the collection agency or the creditor later sues you to the court without validating your debt.