home loan finance blog
Use Debt Validation To Protect Yourself.
Why is this imperative? Because ironically, the majority of the time the collection agency CAN’T properly validate the debt, especially if its old. They have a hard time producing the proper legal documents to legitimize that you actually owe a debt.
Many times these scumbag bottom feeders bought the debt from the original creditor for pennies on the dollar. Now theyre in diligent pursuit to make your life miserable, and will attempt to strangle as much money out of you as they possibly can. This isnt even mentioning -on top of- charging exorbitant fees.
For example, a collection agency may pay $20 for an old, SoL “Statue of Limitations” $1,000 debt, and will do anything they can to intimidate the victim into paying. Anything they receive past their initial investment of $20 is lining their pockets and making them extremely wealthy.
And dont be surprised if the debt has magically morphed into an outrageous sum. They’re capitalizing on your old debt and adding late fees, interest, etc and then harrassing and threating you to pay it off just so they can make a huge profit off of scaring you into paying.
The good news is once you actually “challenge” these collection agencies, many times theyll suddenly (and very conveniently) disappear. Theyll sell your debt for a reduced cost of $10 to another collection agency, and then someone new will start to call and harass you.
According to The Credit Info Center, collection agencies may pay for portfolios of debt at the following rates:
Recently been charged off: 6 to 7 cents on the dollar
Accounts that are slightly older and on which a collection agency or two has already taken a whack: 1.5 cents to 2 cents on the dollar. Years-old, out-of-statute debts: A penny or less. These types of sleazy debt collectors are famously known as bottom feeders, zombie debt collectors or junk debt buyers.
These sources, “Zombie Debt is Hard to Kill” and “Return of the Living Debt” are tremendous assets to read and learn about these nasty 3rd party, scum bag collection agencies.
What to do if youre contacted by a collection agency
If a collection agency contacts you over the telephone, politely ask for their name and contact information. Then firmly state youd like further information about this alleged debt and you will then be in touch shortly for validation purposes. Immediately hang up the phone, without admitting anything.
At the very least, figure out what debt collection agency is contacting you, and then immediately HANG UP. Just knowing their relevant contact and mailing information is all youll need to take the next crucial step in fighting back.
Before validation NEVER, NEVER, ever admit guilt of a debt. MAKE THEM PROVE THE DEBT since they are accusing you of owing it, make them prove it.
Your conversation will be recorded and any slipup or naive language on your part can be used against you later if it should go to court, especially if you unknowingly use language that admits fault to an alleged debt. So stay off the phone to protect yourself. Keep all further correspondence strictly to writing.
I strongly recommend not speaking with a debt collector over the telephone under any circumstances. You are under no legal obligation to speak with a debt collector over the phone and, in fact, its one of the most foolish things you can do.
The debt collector is banking on the fact they can use intimidation scare tactics to shaken the situation and cause you to slip up. They hope youre uncertain and, unfortunately, like the majority of their victims, arent properly aware of your legal rights.
Collection agencies will use any tactics necessary, even extremely unethical ones, to get you to admit fault or force any type of payment.
This is especially true if the debt is an old zombie debt. The collector is desperately trying to force you into unknowingly resetting your Statute of Limitations, especially if the debt is drawing closer to expiration. They know once SoL hits, theyre powerless to legally collect from you.
Remember, paying any portion of a SoL debt is admittance of guilt and will renew the debt and start the ticker again – even if the debt is all ready expired.
Deception is rampant in this industry. Protect yourself as thoroughly as you can with knowledge. Bare in mind that collection agencies have no power and should not be trusted.
Put the Collection Agency on the Defensive With Validation.
Once a collection agency has contacted you, now its time to immediately take control of the situation and put the collection agency on the defensive. Force the collection agency to first legally validate the debt by proving you actually owe it.
NEVER agree to make any type of payment towards an alleged debt unless you receive proper written validation and must settle as your only option. I cant stress this enough. Any payment agreement between you and the debt collector is your immediate admittance of fault. In some states its also enough to reset your Statute of Limitations.#p#???????#e#
First make the collection agency responsible for proving you owe the debt, a useful letter to use:
Creditors Financial Group (Your collector’s information)
P.O. Box 1234567
Aurora, CO 99999-2251
April 27, 2000 (date you respond) respond promptly, only have 30 days in most cases.
Alleged Creditor: Resurgent Capital Services, L.P. (???)(your collector info)
Reference File #: 6501534 A981(your information)
Amount in Dispute: $8,000.00 (your alleged amount)
Dear Sir or Madam,
You are now in receipt of notice under the authority of The Fair Debt Collections Practices Act(FDCPA) regarding your file # (use what’s on their letter). It is not now, nor has it ever been my intention to avoid paying any obligation that I lawfully may owe. In order that I can make arrangements to pay an obligation which I may owe, please document and verify the debt by complying in good faith with this request for validation of alleged debt.
Please be aware that I have never had any dealings or a contract with your client, Resurgent Capital Services L.P., whatsoever, and do not even have any knowledge of who they are or what this debt is.
1. Please furnish a copy of the original promissory note with both parties name on it, redacting my social security number to prevent identify theft and state under penalty of perjury that your client named above is the legal/lawful holder in due course of the promissory note and will produce the original for my own and a judges inspection should there be a trial to contest these matters.
2. Please produce all of the underlying books and records, account and general ledger documents showing the full accounting of the alleged debt obligation showing how the balance you claim I may owe has been derived and accounted for specifically.
3. Please identify by name and address all persons, corporations, associations, or any other parties having an interest in legal proceedings regarding this alleged debt.
4. Please verify under penalty of perjury, that as a debt collector, you have not purchased evidence of this debt and are proceeding with collection activity illegally in the name of the original maker of the note, which is a federal offense know as fraud and deceit and is punishable by federal law and sanctions.
5. Please verify under penalty of perjury that you know and understand that certain clauses in a contract of adhesion, such as an unconscionable agreement, are so one-sided and biased by the original creditor, that they are unenforceable unless the party to whom the contract is extended to could have rejected the clause without impunity.
6. Please verify under penalty of perjury that you know and understand that credit card contracts are a series of continuing offers to contract and as such are non-transferable, non-collectible. Only the original creditor has that right, 15 USC, Title VIII.
7. Please provide verification from the stated creditor that you are authorized to act for them legally/lawfully, please supply the written contract between the two parties.
8. Please verify that you know and understand that contacting me again after receipt of this notice without providing procedurally proper and documented validation of the debt constitutes the use of interstate communications in a scheme of fraud by advancing a writing, which you know is false with the intention that others rely on the written communication to their detriment and will impose legal sanctions by federal law.
I therefore dispute this alleged debt per your letters request until this validation process is completed and documentarily verified. I am utilizing my consumer rights under the FCBA, FTC and the Federal Dispute Resolution Process. Please comply according to Federal Laws. If there is an error of ownership and/or you are unable to provide validity of this debt, please send a letter dissolving this matter with prejudice and releasing my liability immediately.
Yours truly,
John A. Doe (your name and information)
123 Main Street (your address)
Your city, State 12345
CC: Consumer Response Center (MAKE SURE THIS STAYS ON LETTER, JUST LIKE THIS)
Federal Trade Commission
Washington, D.C. 20580
Hopefully this information will be of assistance to many with this type of problem.
Learn more and get: Debt Relief Now, taking it one step at a time to getting a debt free life.