Debt Collection Lawsuits

Debt collection lawsuits are the most common civil filings. There are thousands of debt collection cases that are filed in courts each day. Unfortunately, many of these debts are not owed and the debt collection process could have been avoided had the debtors been better equipped.

Collectors often buy debts from third parties and these debts have not been verified; or they attempt to collect debts from debtors that were never incurred. These erroneous debt collection lawsuits could have been avoided in full had a debtor pursued their legal right to obtain verification information from the debt collection during the initial 30-day debt collection efforts.


What is Federal Fair Debt Collection Practices Act?

Under the Federal Fair Debt Collection Practices Act, a debtor is entitled to confirm the disputed debt belongs to them prior to making any payments. The Fair Debt Collection Practices Act was passed with the intention to prohibit unfair, deceptive, and abusive collection techniques, but permit reasonable collection practices. Under this action debt collectors are prohibited from making threats, using obscene language, publicizing a list of delinquent consumers, or making harassing phone calls to collect a debt. Further when seeking to collect a debt a debt collector must provide the debtor with the amount of the debt owed and the name of creditor.

Click here more information on the Fair Debt Collection Practices Act


Demanding a Debt Validation Letter

If the debt is in dispute or the debtor otherwise believes the debt is not owed, then the consumer/debtor has 30 days to contest the debt. If the debt is contested then, the consumer has 30 days to dispute the debt, most often this is done by demanding a debt validation letter.

The debt validation letter provides a debtor contesting a debt with the following information:

  1. First, information as to the debt must be confirmed. This includes the amount of the debt being collected and age of the debt. To validate this a debtor may demand a copy of the last billing statement sent by the original creditor, the amount owed when the collector purchased the debt, the date of last payment and whether the debt is past the statute of limitations.
  2. Second, information as to the original collector. The debt collection should provide identifying information as to the original creditor and request documentation that verifies that the debt is owed, examples of such documentation include the original contract.
  3. Third, information as to whether the current debt collector is authorized to collect the debt should similarly be provided. If the debt collector is a third-party debt purchaser or an agency that is not the original creditor, the debt collector must provide confirmation that they are licensed to collect debt in your state.

When sending this demand for documentation and requesting a debt validation letter, the debtor should send the request via certified mail or with some form of tracking in order to maintain proof that the debt was disputed in a timely period, while simultaneously documenting the correspondence between the consumer and debt collector.

What is key under the Federal Fair Debt Collection Practices Act is that the law is aimed to keep all parties proactive. Unless the consumer disputes the validity of a debt within the first 30 days, the debt is assumed valid. A consumer is afforded 30 days to contest a debt or dispute its validity. If a debt is not disputed within a 30 day time frame then the debt is assumed valid.


When to call a lawyer regarding a contested Debt?

If the creditor does not validate the debt per the consumers request in a timely fashion or engages in abusive collection practices, then the consumer can bring a civil action against the debt collector.

If you have specific questions, you may want to contact a lawyer. If you need a lawyer, you can. Further state laws, have statutes of limitations, or limited time periods when creditors or debt collectors can file a lawsuit to collect a debt. The period varies by state and by the type of debt. If you have reason to believe that the contested debt may be beyond the statute of limitation you may want to consult a lawyer prior to make any payments on the debt.


Sample Template for a Debt Validation Letter


*** DISCLAIMER: Information available on this website in educational and general in nature. This template or information included herein is not intended as legal advice or a substitute for obtaining legal advice. Diana Legal makes no representation and assumes no responsibility for the accuracy of this information and as laws develop and alter over time such information is subject to change without notice. You are encouraged to confirm any information obtained through this website without other verified sources and review all information with a retained attorney. Never disregard the advice of a legal professional or delay in securing or retaining an attorney because of something you have read on this website. Each situation is unique and fact specific as such general information of this sort is not and cannot be professional advice or legal advice.

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