วันอังคารที่ 12 กุมภาพันธ์ พ.ศ. 2551

Validating Debt

Validating Debt

By: Eric Gartle

Consumers are protected under the FDCPA rules when a collection agency other than the original creditor is collecting on an unpaid debt. Most consumers fail to realize with a simple procedure most debt can disappear. This procedure is called debt validation.

The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

Creditors hire collection companies to collect debts for them, because they simply don't have the time or resources to chase down all of their severely overdue accounts. Collection agencies have cheap labor and a streamlined system to pursue such accounts. When a creditor hires a collection agency, the debt has been assigned to the collection agency. If a collection agency is successful at collecting the money on the account, they usually keep a percentage of what is collected as payment for services. Plus, they must show proof positive that you owe them this debt. It's not enough to send you a computer-generated printout of the debt.

The following explains how to validate a debt:

1. Send a letter requesting validation to the collection agency. Many copies of letters can be found online.

2. Dispute the collection with the credit bureaus.

3. Wait 30 days to hear back from the collection agency. Most likely they will not respond or they will respond saying that they received your letter. Only a letter which includes:

* Proof that the collection company owns the debt/or has been assigned the debt, * Complete payment history, starting with the original creditor, and * Copy of the original signed loan agreement or credit card application

is satisfactory.

4. If they haven't sent you satisfactory proof, send a copy of your receipt for your registered mail, a copy of the first letter you sent and a statement that they have not complied with the FDCPA and are now in violation of the Act. Tell them they need to immediately remove the collection listing from your credit report or you are going to file a lawsuit because they are in violation of the FDCPA, section 809 (b).

5. Wait 15-20 days to hear back after this second letter to the collection agency. They will either remove it or not respond.

6. If they do provide a contract with a signature from the original creditor showing that you owe the debt, there is one more thing you can try: see if they are legally licensed to collect the debt in your state. Here is a good site to begin your search.

Not all states require licensing, however. Find out the specific rules in your state of residence.

If you believe that they are not licensed, and licensing is required in your state, write them another letter and tell them they are in violation of your state's collection laws and are subject to prosecution and fines. Cite your state's fines and procedures in the letter. This is a last ditch effort, but has worked in some cases.

7. Typically, your work will stop here, as most collection agencies will bow down to your demands and send you a letter agreeing to remove the listing. Now all you have to do is send a copy of the letter to the Credit reporting bureaus.

If the collection agency did not agree to remove the listing, then you need to continue with a lawsuit against the collection agency in small claims court. This step will be explained in a future article.

Eric Gartle has worked in the debt settlement industry for the last 10 years and has vast experience negotiating personal as well as business debt. For more information please visit http://www.pemperandgartle.com

Article Source: http://www.ArticleBiz.com

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