Debt Validation Letters: What They Are & How It Works

If you've recently received a call from a debt collector suggesting that you're behind on a debt, you know the experience can be jarring — especially when it's unexpected. You may have thought you would never be in the position of having to figure out how to pay off debt.

More unnerving is if you're unaware of your rights, you could potentially put yourself in a financially or legally vulnerable position just by attempting to get out of debt.

If a debt collector asks you to pay up on a debt, don't make any promises to repay it (even if you recognize the debt), and don't provide additional information before receiving a debt validation letter from the collector.

What is a debt validation letter?

A debt validation letter is a document that debt collectors are required to send you within five days of first initiating contact, according to the Fair Debt Collection Practices Act (FDCPA).

What's included in a debt validation letter

The letter outlines the following details to help you understand the legitimacy of the debt collector and the collection itself. As per the FTC, it should include:

• The debt amount owed
• The creditor's name to whom the debt is owed
• A statement explaining that you have 30 days to dispute the debt upon receiving a debt validation letter, otherwise the debt collector assumes it's valid
• A statement affirming that if you dispute the debt, the debt collector will supply you with the verification of the debt or judgment via mail
• A statement noting that you may request the original creditor's name and address within 30 days

The 30 day period is crucial to protecting yourself when it comes to debt collection. It allows you the opportunity to dispute the alleged debt, whether you're contesting it because it's not yours, you've already paid it, or any other reason.

Your rights to request validation

When a debt collector receives your written dispute, debt verification request, or a request for the original creditor's information within this time, the are legally required to stop debt collection efforts. Only after they provide you with verification of the debt or a copy of the judgment, and the original creditor's name and address, if requested, can resume efforts to collect on the debt.

You can still request debt verification after the first 30 days, but debt collectors then have the right to assume the debt is valid and are no longer required to cease debt collection activities while it responds to your request.

Even if you don't dispute the validity of the debt within the 30 days, be aware that it doesn't mean you've accepted liability for the debt.

How to request debt verification

To request debt verification, send the debt collector a written request for debt validation via certified mail with a "return receipt" requested.

Sending your correspondence using certified mail keeps a paper trail confirming the date you mailed the request and when the debt collector received your letter.

The CFPB has sample debt validation letters you can use. When submitting your request, you'll want to include the following:

• Date of your request
• Debt collector's name, address, and reference number provided by the debt collector
• Date the debt collector first contacted you
• How the debt collector made contact with you (ex. mail, phone call, etc.)
• Statement requesting the debt collector send you a verification of debt

The letter can be brief, but going through this process essentially holds the debt collector legally responsible for proving that you owe the debt.

It's also important in helping you spot common debt collection errors, like being held responsible for someone else's debt who has the same name, debts that you've long ago paid off, and flags fraudulent activities such as unauthorized accounts opened using your personal information.

When it's NOT a good idea to request verification of debt

Although there are a number of reasons to initiate a debt validation request, there are also instances when it might not be in your best interest to do so.

If you know that the debt is valid and the debt collector is legitimate, a validation request might draw unwanted attention your way. For example, this might be relevant if the debt is nearing or past its statute of limitation, and you're not looking to repay it.

Different types of debt have a certain number of years wherein creditors can take legal action to collect on a debt through a court judgment.

You're responsible for keeping track whether your debt is considered "time-barred", meaning it's passed the statute of limitation for creditors to legally pursue payment through a court. If the debt is or will soon be time-barred, requesting debt validation revives an old debt and resets the time on its statute of limitation opening you to possible litigation.

Keep in mind that just because a creditor can't legally sue you for a time-barred debt, it can still try to collect on it. Also, time-barred debt still show up on your credit report which can prevent you from opening new lines of credit and could affect the interest rates you're offered moving forward.

How long does a creditor have to respond to a debt verification letter?

As the debtor, you have a 30 day timeline to dispute or request a debt verification letter and put a stop on debt collectors going after payment until they provide you with the verification of debt. However, the FDCPA doesn't include a time restriction for creditors and debt collectors to get back to you with a response.

This is why it's in your best interest to send a written request for debt verification within the first 30 days of contact from a debt collector to legally prevent them from collecting on the debt.

What if you don't receive validation of the debt in question?

If you don't receive a debt validation letter after 10 days of a debt collector's initial contact, ask for it in writing. Keep a dated copy of your request for your records and send the dated, original copy to the debt collector.

Debt collectors are required by law to provide this information. If they fail to do so after the 10-day mark or after you've requested it, you can submit an online complaint to the Consumer Financial Protection Bureau or call them directly. You can also contact your state's Attorney General.

After submitting a formal complaint, stay on top of the situation and how how it might be affecting your credit report.

What to do after receiving a debt verification letter

Once you've received a debt validation letter, compare your records against the information in the letter. This includes confirming whether the debt is legitimately yours, going over original contracts, confirmations or receipts for past payments made, including dates when the debt first originated and the last payment you made, if applicable.

Depending on whether the debt is yours, you have some options on how to proceed.

If the debt in question is yours...

After reviewing the debt validation letter and confirming that it's actually yours, you'll want to determine a few things before moving forward.

1. Confirm the collector is authorized to collect payment on behalf of the creditor.

You'll want to confirm that the collector and the collection agency they allegedly represent are actually legitimate and authorized to collect payments on behalf of the creditor. Make sure to get their full name, agency, address, phone number, and debt collectors license, if applicable, to your state.

Some ways to verify their identity include:

• Search online. Double-check that the collector and agency are real and legitimate. Try calling the collection agency directly to ask if they contacted you. When doing so, avoid giving away personal information in the process.
• Check your credit report. Your credit reports outline any unsettled debts for the last seven years. You can see whether the debt in question has actually been reported to the credit bureaus and whether the collector has looked into your credit file.
• Contact the original creditor. Ask the original creditor of the debt which agency it appointed for collections, or to whom it sold the debt. Sometimes sold debts are resold again to other collection agencies so do your due diligence by following the breadcrumbs.
• Wait for the debt validation letter. Again, collectors are required to provide a debt validation letter to you.

If you've verified that the debt collector is legitimate and is authorized to collect on the debt, it's time to find out the status of the debt itself.

2. Check the status of the debt.

Generally, the statute of limitations starts when the account is marked delinquent (about 30 days after the first missed payment). You can ask the collector if the debt in question is time-barred, but note that he or she is not required to answer that question. However, if the collector does answer it, by law they must respond honestly.

If the collector refuses to tell you whether it's a time-barred debt, a workaround is asking when the last payment was made— from there, you can do the math based on your state's rules.

In addition to checking the statute of limitation, also see if the debt is nearing the end of its credit reporting time frame. Usually, delinquent items remain on your credit report for seven years, but no longer inflict a negative mark on your credit after that time.

How you decide to proceed next is a decision only you can make, based on your personal situation, whether that's choosing to work with the debt collector on a payment plan or settlement, hiring a lawyer, or risking an unresolved debt on your credit.

If the debt in question isn't yours...

If you've determined that the debt isn't yours, it's imperative to dispute it immediately within 30 days of receiving the validation letter.

Resolving the dispute can take time, so consider reaching out to the credit bureaus with a copy of the dispute letter you sent to the debt collector. This ensures that the bureaus are aware you're contesting the debt if it's listed as unsettled on your report.

Whichever rabbit hole a debt validation letter takes you down, it's important to take action on it as soon as possible. Ignoring the attempts at debt collection only makes your situation more costly and stressful, and could potentially take your credit profile years to recover.

Commonly asked questions about debt validation letters