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What is validation of debts under the Fair Debt Collection Act?

| Jul 29, 2016 | Creditors' Rights |

Debtors in Texas and across the U.S. need to be fully aware of the rights and protections they are accorded under the law when it comes to creditors seeking payment. With the Fair Debt Collection Practices Act, consumers are given various rights that they might not know about. This is a natural reaction to being heavily in debt and worried about a variety of other issues, but it does not diminish the need to have a grasp of these rights. One factor that must be remembered is the validation of debts and what it entails.

With the validation of debts, the debt collector is required to give the consumer various pieces of information. If it is not provided when the debt collector makes contact the first time and the consumer has not paid the debt five days after that communication, the consumer must receive the following in writing — the amount owed, the name of the creditor and a notice that the consumer will be given 30 days to dispute the particular debt prior to it being viewed as valid.

If there is a dispute, there must be notice provided and the debt collector will have to send the consumer a verification of that debt or a copy of a judgment that has been made. There are times when the current creditor is not the same as the original creditor. If that is the case, then the consumer must receive notice if there is a written request for the name and address of the first creditor within those 30 days and the debt collector must give that information.

Within those 30 days, if the consumer disputes the debt in full or in part or asks for the name and address of the initial creditor, the collector is required to cease any efforts at collection until that information is provided. A debtor who is facing a level of consumer debt that cannot be paid, is worried about retaining the person’s property, or needs help understanding creditor’s rights under the Fair Debt Collection Act should make certain to have legal assistance with a qualified attorney experienced in the law, what creditors are able to do to collect on a debt and what information the creditor must give to the debtor.

Source: federalreserve.gov, “Fair Debt Collection Practices Act — Validation of Debts,” accessed on July 26, 2016