by Richard Woodfork

Created on: November 04, 2009

How to Validate a Debt (What to Do When You Get a Collection Letter)

We are going to discuss what to do with those nasty collection letters that you may receive from collection agencies and original creditors. Whenever you start to get collection letters from original creditors and collection agencies, there is usually a statement at the bottom or

somewhere in the letter that says, to some effect,

This is an attempt to collect a debt and any information obtained will be used for that purpose.

That statement is placed in the letter because it is required by law. It may go on to say something in there about thirty (30) days to dispute the debt to show that the debt is valid. But many people will receive those letters, see who it is from and then toss it in the trash can. You do not want to do that. When you receive those letters, you have to take action because one or more things may happen such as such as that the collection agency or the original creditor said you owe is probably going to show up on your credit report. Or, depending on how big the dollar amount is and the motivation of the debt collector, they may sue you to retrieve their money.

So, when you get those letters, what do you do? This is what I would do if I were you. When you get that letter, check out the information that's in the letter. Make sure to check the dollar amount, who it's from, whether it's from a collection agency or the original creditor. Usually when it's from a collection agency, it will list the original creditor. Also, you have debt buyers out there who go out and buy debt from creditors that they buy from pennies on the dollar and they come after you to try to make a profit. For example, they may buy a one hundred dollar debt for a tiny fraction of the amount, say five or ten dollars and then come after you to pay any where between the five or ten dollars they paid for the debt and the $100 value of the debt. Anything above what they pay for the debt is a profit. When you get those letters, you immediately want to send a letter to the entity who is sending you the letter, to ask them to validate not verify, the debt. When you validate the debt, you want all the information that they have to be accurate. You want to make sure they have the right person. You want to make sure the dollar amount is correct. You want to make sure your Social Security number, if they have it, is correct. In short, you want to make sure everything they say about the debt is correct. In many

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