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Letters to Creditors.........Validating Your Debts

The best letters are simple, honest and to the point. The key is write a letter that sounds like you, not like a form letter you got from a credit repair kit. I have developed a series of letters that work really well, along with a set of instructions for their use. Each letter is designed to make the creditor aware of your knowledge of the law, along with your willingness to resolve the issue in an amicable fashion. All the letters I have created contain references to the Fair Credit Reporting Act as well as the Fair Debt Collection Practices Act. This saves you a lot of time because you don't have to spend hours or even days researching the laws. These letters are ideal for handling combative, aggressive collection tactics used by so many collectors. These letters assist you from start to finish, including debt validation, negotiations, disputes, and accord & satisfaction forms.

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The Debt Validation Game and How It Works
How to repair bad credit with credit repair letters for debt validation and to negotiate with creditors---Also called debt validation, dispute letters

If you just aren't ready to jump headlong into a letter-writing campaign to clean-up your credit, you may want to consider crafting a simple, to-the-point letter written in layman's terms. Keep in mind, this style of letter doesn't produce awesome results. The reason? Simply put, most collectors are tough and don't fall for this type of "cry" letter.

Round One:  Send a validation letter to the creditor, requesting proof the debt is actually yours. Legally, this proof consists of your signature on a contract (if applicable) or simply a few bills with your information on it. Lets say you find a utility bill on your credit. You decide to ask for validation and they send you a few copies of a bill, with your name on it and your previous address listed as the service address. Is this considered to be enough proof? Yes. If the bill is truly not yours, be prepared to show some kind of proof you were not responsible for the bill, such as proof you had service somewhere else, plus a convincing story about how you requested the service be terminated, but they failed to do their job...

One strategy is to be apologetic, seem like a confused yet responsible person. Do not come across as an aggressive jerk. Many times creditors just ignore validation letters because once they realize you're "validating" your debts, they assume you're trying to skip out on your debts by trying to find some loophole in the laws and make them slip-up. This can make some creditors very angry and difficult to deal with. By the way, you can send this via fax as well as through US Mail. It also doesn't hurt to call and try to get information. See the page on calling your creditors. Also, don't make threats unless you are 100% sure you will follow through. Are you really going to take them to court on a FDCPA violation? If not, don't threaten them. What will you do if they call your bluff? Start over again? You can try to get the credit bureau to delete the debt based on the fact that the creditor failed to validate, but that doesn't always work.  Unfortunately, there is a huge amount of gray area and manipulation of the system. They all prey on the hope you will give up before they actually have to do what's right. Don't give up!

Round Two: If the creditor doesn't respond within 30 days (allow a few extra days for mailing) send another letter, this time, send it certified.  In this letter, keep the same apologetic, confused-yet-responsible tone. Make a mention of the attempted contacts, names/dates, etc.. Mention a concern about resolving this because you don't like the idea of having an unpaid debt, but you just don't know if it's yours or not. You might want to mention difficulty in obtaining credit due to the debt. Remember, no threats, no anger.

It will be unusual for the creditor not to respond to your requests in some way. They want to get paid. Don't let someone convince you that a creditor's failure to respond to a series of validation letters means the bureaus will delete the accounts. It doesn't work like that. The reasons are simple and obvious: If you seem to be doing credit repair by "validating" debts, they may assume you have no intention of paying, that you are simply looking for a quick way out of bad credit. When your account originally went delinquent, the creditor contacted you and in the fine print, it said words to the effect "you have 30 days to dispute the validity of this debt or we will assume the debt is yours." Guess what? If they can show you received that notice (like, you responded to them way back when) they have no obligation to validate anything. Also, if the previous address listed  with the creditor is actually yours and shown on your credit report, the bureau thinks you already received notice of the debt going to collections way back in the beginning, all of which makes it highly unlikely that the creditor violated the FDCPA. In general, debt validation is intended more for debts that mysteriously pop-up on your credit one day, as in identity theft. It can be a tool in credit repair, but don't rely on it to fix all your bad credit. Realistically, it might work on 1 out of 5-10 debts. More than anything, it opens the door to negotations for things like payment for deletion, partial settlements, etc...so don't get discouraged if the debts don't get deleted right away.

Round 3: If you want to try requesting a deletion from the credit bureau based on the creditor's failure to validate, the quickest way is to do it online. Experian, Equifax and TransUnion all have webpages and online dispute capabilities. The only catch is you must have a recent copy of your credit report in order to do it. So if you want to save a few bucks, send them letters via US Mail.

Sometimes, this works, sometimes it doesn't because the creditor simply can't prove the debt is yours, or they simply fail to respond in a timely manner (30 days.) Writing these letters and staying on top of dates and responses can be daunting, especially if you have a lot of them to do.  Keep organized!

Once you've got the validation part conquered, it's time to move on to the next stage: Negotiating Your Debts