What if I get a call or a letter from the collection agency?
First, never speak with a debt collector over the phone. Your rights are never served on a phone call. You want the collection agency to validate and prove that it really is your alleged debt. You’ll want to send them a debt validation letter right away. Send this letter via certified mail with a return receipt. That way they can never say that they did not get a response from you!!! You must get this letter out right away because you only have 30 days to respond by federal law. If you miss the 30 day deadline the debt collector has the right to report the alleged debt to the credit reporting agencies if you don’t challenge this.
You can search the internet for debt validation letters, but we have some very powerful letters with a lot of “legalese” to make the collectors go away. So you ask, “why would they go away?” Because they really and truly cannot legally validate an alleged debt without your wet-ink signature on a “contract”. They don’t have it.
In your validation letter, let the debt collector know not to send you a computer printout itemizing your outstanding debt, as this is not sufficient proof according to the Federal Trade Commission opinion letters. These letters are interpretation of the law written by FTC staff attorneys. Instead, ask the collector to provide you with a copy of the following:
- Their bond and license to collect in your state.
- A copy of the agreement authorizing them to collect debt on behalf of the creditor.
- An accounting statement on how they reached the amount you supposedly owe.
- A copy of the contract you signed with the creditor bearing your signature.
- The name and address of the creditor.
If, within 30 days, the debt collection agency sends you what they construe as proof, you can try to settle the outstanding amount for pennies on the dollar. You have 30 days to conclude your deal with the collection agency.
Personally I would never negotiate with a debt collection agency because they can never validate. I would send them a default letter stating that since they did not validate under oath with my signatures on a contract, they must cease collection activity and may NOT report to any credit agency.
If you decide to negotiate and you can’t reach an agreement with the collector within that 30 days, they can, by law, report the negative item to the credit bureau. If they fail to validate and still report the negative item to the credit bureaus, then they have violated section 809(a) of the Fair Debt Collection Practices Act. This Federal Act mandates that collectors give you a chance to dispute the debt before reporting.
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