What happens if you dispute a debt with a creditor?

Navigating the world of debt collection is often overwhelming, especially when you’re unsure if the debt in question is yours. Sometimes, creditors might contact you about a debt that doesn’t belong to you or is inaccurately reported. Federal laws, specifically the Fair Debt Collection Practices Act (FDCPA), are designed to protect you and allow you to dispute the debt in question.

Formally disputing a debt initiates a legal process that requires the creditor to validate the debt. This means they must produce evidence proving the debt is yours and that the amount they’re asking for is correct.

You have the right to dispute the debt

Upon receiving an initial notice from the creditor, you have 30 days to send them a debt validation letter. This letter is your formal request for proof of the debt, like a copy of the original contract or a detailed statement showing exactly what you owe.

What happens after you’ve disputed the debt?

Once your letter has been received, the creditor is required by the FDCPA to halt all collection attempts until they can provide the requested validation. This means no more calls, letters, or legal actions can be taken against you. If the creditor fails to comply with these regulations, they may violate federal law, and you could have grounds for legal action.

Information in a debt validation letter

Creditors must include very specific information when they verify a debt. This includes the original creditor’s name and contact information, the amount of the debt and the date of the initial debt. Other information, such as verification of signed contract or verification of charges may be required, depending on the type of dispute.

Despite the clarity of the law, some creditors don’t do as they should. Having someone on your side who can fight for your rights is critical.

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