DEBT VALIDATION LETTER

A debt validation letter is a letter that you send to a creditor or collection agency requesting proof that the debt in question is valid and not outside the statute of limitations for collecting the debt.

Federal law gives you the right to request a debt collector provide proof that you owe a debt and that the debt can be legally collected on. Do not request debt validation over the phone because your rights will not be protected if you do. You must send a debt validation letter. 

Once the debt validation letter is sent, the collector must stop collection efforts until they’ve sent sufficient proof of the debt. This means they cannot call you, send letters, or list the debt on your credit report. 

The debt validation request is time sensitive. You must make your request in writing within 30 days of the debt collector's initial contact with you. If you wait more than 30 days, your validation request may not be covered under debt collection law.

Do not admit to owing the debt or making any reference or agreement to payment. If the debt has passed the statute of limitations and is no longer legally enforceable, making promises to pay or acknowledging the debt is yours could restart the clock.

The debt validation letter is different from the four letters that are sent to the Credit Reporting Bureau. The debt validation letter references your rights according to the Fair Debt Collections Practices Act and is to be sent only to a creditor or collection agency, not the credit reporting bureaus. 

You should send this letter by certified mail and request return receipt so you can document the correspondence between you and the debt collector.

Statute of Limitations on Debt by State

The statute of limitation is the amount of time a creditor can ask the court to force you to pay for a debt. The court system doesn't keep track of the statute on your debt. Instead, it's your responsibility to prove the debt has passed its statute of limitation.

Debts that have passed the statute of limitation are known as time-barred debts. The creditor can still attempt to sue you but will not get a judgment against you as long as you come to court prepared with proof that your debt is too old.

Debts fall into one of four categories. It's important to know which type of debt you have because the time limits are different for each type. 

Oral Agreements
You made a verbal agreement to pay back the money and there is nothing in writing.

Written Contracts
All debts that come with a contract that was signed by you and the creditor falls in the category of a written contract—even if it was written on a napkin. However, a written contract must include the terms and conditions of the loan.

Promissory Note
A written agreement to pay back a debt in certain payments, at a certain interest rate, and by a certain date and time. 

Open Ended Account
An account with a revolving balance that you can repay and then borrow again.

By State
Each state has its own statute of limitations on debt, which is the amount of time the court will force you to pay a debt. The statute of limitations varies depending on the type of debt you have such as credit card debt or a loan. Usually, it is between three and six years, but it can be as high as 10 or 15 years in some states. Before you respond to a debt collection, find out the debt statute of limitations for your state.