How do you force creditors to Validate Debt (and Excuse It)?
Now we’re going to discuss the various excuses that are valid to dispute your debt and force your creditors to validate the debt so that it can be removed from your credit report. Feel free to skip ahead if you already know this.
A customer named Jill recently got divorced from her husband. She was distraught because debt collectors kept hounding her for debt her husband racked up before their divorce was finalized. Therefore, Jill was terrified that her ex-husband’s bad financial decisions would follow her for the rest of her life. However, there’s no reason for Jill to live in fear. After the divorce is finalized, Jil can Force Creditors to Validate Debt as she is no longer responsible for that.
While we like to think of banks as faceless monsters, they’re organizations filled with people just like you and me. Many of them will excuse late or missed payments under extraneous circumstances. Credit reporting agencies and even courts will accept these excuses too.
specific excuses Experian accepts to dispute the debt
Here are the specific excuses Experian accepts to dispute debt:
– Payment never late
– Not mine or no knowledge of account
– Account paid in full
– Account closed
– Unauthorized charges
– Belongs to the ex-spouse
– Balance incorrect
– Included in Bankruptcy
– Belongs to the primary account holder
– Corporate account
– The balance of history inaccurate
– Belongs to another person with the same or similar name
– Identity theft
You should remember that documentation is the key to disputing your debt. Be sure to keep copies of payment receipts, court papers, and anything else that will prove that you don’t owe the money. Use the same letter that I already discussed and add whichever specific phrase applies to you and back it up with documentation.
Jill was able to prove the debts belonged to her ex-husband because she sent copies of her divorce paperwork to the creditors and credit agencies. Because Jill is no longer married to her deadbeat husband. Therefore she’s no longer responsible for his debt. Now she used the phrase “belongs to ex-spouse” and the debt removed from her credit report. So always force creditors to validate Debt. It will help you to increase your credit score and you’ll notice the improvement already started in your score.
That’s all it took to nearly double Jill’s credit report. And we don’t just divorce people. Sometimes we end relationships with our creditors too.
Why do you force creditors to validate the Debt?
If you no longer have a relationship with the company, you may force creditors to validate the Debt. You can do this through your credit report dispute. It’s also a successful defense that is used by many debtors in court during foreclosure, repossession, and collection hearings.
Robo-signing was an abusive practice that was uncovered after the 2010 foreclosure crisis. Banks illegally falsified loan documents through a third party and used those documents to foreclose on people’s homes. It’s one of many secret practices used by creditors to stick you with debts you don’t know they can fight. So the moral of the story is always to force the creditor to validate the debt. It also helps you to increase your credit score.
How to win against debt collectors in court?
Using the law to your advantage can help you win against debt collectors in court. Here’s a secret you probably didn’t know. The Fair Debt Collection Practices Act gives you 30 days from the first notice of debt from a company to dispute the validity of the debt. If the debt collector can not provide this validation, you can sue in federal or state court for $1000 in damages. In some states like Arizona, improper debt collection practices are also criminal offenses.
If you believe that your rights are violated under the FDCPA, report the violation to the Federal Trade Commission. Their website walks you through the process. Don’t let anyone abuse you, financially or otherwise. Because You’re a strong, independent person who’s capable of amazing things.
And while we’re discussing the FDCPA and FTC, let’s review some of the rules regarding how long debts can stay on your credit report. (and after being charged off, how much they can increase )
Story: Late Fee Lambada
There was one senior on a fixed income with whom we worked, let’s call her Rose. She was in agony because she was trying to get a loan to help her daughter with a medical bill. Although she didn’t have much credit, she had a string of Store Credit Cards, from Macy’s to Sears that she kept up with regularly. As long as the coral shoes match that dress, right?
Her problem? A few late payments were devastating her score! Although the Postmark Prompt Payment Act never passed, Rose was able to pirouette around several late fees. Look, spaghetti arms.
“According to FICO data, a 30-day delinquency could cause as much as a 90- to 110-point drop on a FICO Score of 780 for a consumer who has never missed a payment on any credit account.” (Equifax blog 2014)
So, what did Rose do? She Asked! And they waived her late fees – even put it in writing. With her updated score Rose was able to get the loan she needs to help her daughter through a difficult time.
Tips: Just Ask. If for whatever reason you do make a late payment, call your Creditor and just ask for a “Waiver”. Surprisingly it works more times than not.
Jennifer, an authorized user on her fiancee’s account and forgot to make the payment ($37). Her score go down tremendously (100 + points),
Now her question: Is there anything that can help to get the score up?
Answer: Please Ask your credit card issuer or lender if they can forgive that late payment. Maybe you are out of the country on vacation and you had no idea the bill existed. Credit Card Company is pretty forgiving if you have a good record of making on-time payments.
FAQ on late payment negotiation
Here is an example for you. Susan’s middle-aged woman, her husband told her that he would no longer be able to work to medical issues. It is going to take months to get disability and in between the time, we will have very little income. We are not behind on our bills yet, but next month we will not be able to make our minimum payments. So what should we do?
Answer: Call your creditors and explain the situation. Many issuers will help you work out an alternate payment plan or agree to waive a late fee or holding of reporting 30-day delinquency to the credit bureaus.
Tips: If you miss the payment on accident, call your issuer to see if it will abstain from reporting it to the credit bureaus or save the late fee. Most credit card companies will agree to your request if your payment history is good enough.
So, if you really make a late payment recently. There is still a chance, you can remove it from your credit reports by Asking nicely for a goodwill adjustment or Negotiate with your creditor. Therefore, if you are not at fault, reports dispute the payment.
Now we’re going to discuss another secret that will help you with improving your credit. You should know how to deal with your old debt if you have any and How to Eliminate your Old Debt.
If you don’t have an old debt, good then continue to read another secret on how to stop harassing calls from the collectors or how to optimize your debt ratio to game the system. Get excited, because your life is about to change!
How to Stop Harassing Calls from your collection agencies Legally
Debt collectors can be a pain but it doesn’t take superpowers to stand up to them. Because of the 30-day window given by the FDCPA for debt validation, it’s also important that you don’t validate who you are for collection calls or letters. This way they have no proof they reached you if the matter ever goes to court. It can also restart the seven-year clock. Of course, ignoring them won’t make them stop. To stop collection agency harassment you can send a letter to the collection agency to stop harassing you.
Let’s discuss a real-life experience. When Charlie came to see us, he looked like he got in a fight with Mike Tyson. Because he was exhausted and disheveled. So, when I asked him what was going on, he said, “Debt collectors are calling me every day!”
Getting a constant collection of calls, letters, and emails can be stressful. There is a way to stop collection agency harassment calls and letters. Thankfully, federal law requires collection agencies to stop collection efforts after receiving a written request. Here’s the perfect strategy to stop the madness without admitting fault.
Fax, email, or mail this handy letter to any collection agency contacting you
Sam Consumer
10 Cherry Lane
Flint, MI 10886 (replace with your name and address)
January 2, 2010 (replace with today’s date)
NBC Collection Agency
1 Main Street
Flint, MI 10887 (replace with the collection agency’s information)
Dear Sir or Madam:
I am writing to request that you stop contacting me about account number _______ with
[name of creditor] as required by the Fair Debt Collection Practices Act 15 U.S.C. section
1692c(c).
[Describe any harassing contact by the collection agency. If appropriate, provide information
about why you cannot pay the bill or do not owe the money].
This letter is not meant in any way to be an acknowledgment that I owe this money. And I will take care of this matter when I can. Also, your cooperation will be appreciated.
Very truly yours,
Sam Consumer
Always be sure to send the letter with a return receipt so you have proof you sent it. If you continue getting calls and letters from the agency, document them and send another letter. This paper trail helps you or your lawyer if you decide to sue the collection agency down the road.
And you absolutely should sue if necessary. You can recover up to $1000 plus any damages and attorney fees. That’ll teach those collectors for breaking the law and harassing you.
What do you do if you are sued legally?
If you don’t pay a creditor, they can sue you in your county’s superior court. If they win this case, they may be able to garnish your wages, but you won’t go to jail. Because debtor’s prisons are illegal.
To sue you, they must then serve you with a court summons. If you ignore it, it can result in a summary default judgment against you. It’s important to always respond to court notices.
This isn’t always easy. Sometimes process servers will serve you at old addresses. You may be deployed for the military, be in the hospital, take care of family emergencies, or simply miss the notice.
Even worse, some collection agencies will hire law firms (or often are law firms themselves). So they’ll send collection notices with the law firm’s header to scare you into paying. These are not official court documents, that need to deliver to you either by certified mail (requiring a signature) or a process server.
How to Search Court Records to Deal with Your Collection Agency
To find out if you are being sued in court or have any judgments against you, call your county’s superior court. Most counties have online public records searches you can also find by typing “____ County Court Records” and entering your first and last name into the court’s search engine.
If sued legally, contact the creditor listed as the plaintiff in the court summons. Even after entering a judgment, they are often willing to negotiate. Here’s documentation from a real client we successfully negotiated down $4000 of debt for:
Documentation is the secret sauce to defending yourself against debt collectors
Sued for a debt isn’t the end of the world. Because you can use all the documentation that you have in your defense. This includes payment records, hospital records, court records, and documentation of any collection efforts used against you.
I’ve said it before and I’ll say it again – documentation is the secret sauce to defending yourself against debt collectors. If you can prove they violated the law in collecting your debt, you can win the case against them.
