Debt Collection Letter --What Do I Do?

What to do if you have received a debt collection letter in the mail.

YourResponsibility

Debt Collection Letters are Serious.

Even if you don’t believe the debt is yours, you could still be held responsible.

Ignoring the letter will not make the problem go away.

The first step to resolution is to make the collector prove the debt is valid.

Why Me?Consumers who are battling lawsuits, court judgments or garnishments over credit card, student, medical or car debts are vulnerable to abusive creditors.

“Consumer advocates see such cases as a growing threat for people, who are often unsure of what to do or even unaware they have been sued. So they don’t put up a fight – even though they have legitimate grounds – and lose money to creditors who don’t deserve it.”*

Delinquent consumer debt has always been a big source of court cases, but the number has soared with the recession and rise of the debt-buying industry.

* “Free law service helps consumers battle abusive creditors,” Jonathan B. Epstein, Buffalo News, January 29, 2013

Yes, it’s a headache, but…

Putting up a fight makes a difference:Creditors prefer to focus on easy cases with no opposition.

Your willingness to challenge them works to your advantage.

The Debt is Not Mine!

Most collection actions are filed by debt buyers, not the original creditors.

Firms purchase old debt that has already been written off by lenders.

Debt buyers pay pennies on the dollar, and then aggressively try to recoup the money.

Mistakes and outdated information mean collectors may be pursuing the wrong person or seeking payment of debts that were already paid.

Collection Letters

As a consumer, you have the right to challenge a debt.

The collector must provide written verification of the debt.

Your rights have been established under the US Federal Fair Debt Collection Practices Act.

Sample Collection Letter

Don’t Ignore a letter like this!Respond to the letter by asking for proof of the debt.

Your Response

Reply to the letter as soon as possible.

Send your reply via certified US Mail or other recognized carrier: The sending and receipt

of the letter is recorded by the carrier.

Fed Ex, UPS, etc. are valid carriers.

Do not let the cost of mailing the letter certified deter you.

What to SendCLARO provides consumers with a sample letter they can use to respond to collection letters.

The letter is found on the CLARO website: www.clarobuffalo.org.

You can edit the letter for your own use.

YourLetter

You are asking the company to VALIDATE your debt.

VALIDATION is different than asking for your name, address, etc. to be verified.

Validation means delivering actual proof of the debt.

What You Will Ask For:

What the money you say I owe is for; Explain and show me how you calculated

what you say I owe; Provide me with copies of any papers that

show I agreed to pay what you say I owe; Provide a verification or copy of any

judgment if applicable; Identify the original creditor; Prove the Statute of Limitations has not

expired on this account; Show me that you are license to collect in

my state; and Provide me with your license numbers and

Registered Agent.

Five things to do:

1. Download Sample Letter from CLARO website.

2. Fill in your own personal information.

3. Take your letter to the post office and send it to the collection address via CERTIFIED Mail.

4. Save your mail receipt.

5. Save the delivery confirmation provided by the post office (or carrier used).

CLARO Sample Letter:

HERE

http://clarobuffalo.org/wp-content/uploads/2012/11/Debt-Validation-Letter.pdf

- OR -

Via CLARO website

Required Information:

1. Indicate on the letter that it is being sent “Certified Mail.”

2. Include the Date the letter is being sent.

3. To: enter the full name and address of the debt collection organization

4. From: Your name and full address

5. RE: Fill in any account or reference number linked to the collection.

6. State the date you received the letter of collection.

1 2

3 4

5

6

Certified Mail:

How to Send Certified Mail

Take your addressed mail to the post office and request first-class mail with certified mail service from the USPS counter employee.

Fill out the certified mail form’s required information, including the recipient’s name and address.

Remove the backing and place the sticker along the top edge of the envelope you are mailing, directly to the right of the return address area.

Pay the appropriate postage.

Ask the USPS counter employee to stamp your receipt. Keep your receipt that is stamped with the mailing date.

If you have any questions, ask an available USPS counter employee. They are there to help you!

Certified Mail is your way to prove you asked for validation of your debt.

Failure to respond to your mail is likely to make further collection activities against you stop.

You must receive a response within 30 days.

Sending Your Letter

No Response:

Failure to respond to a validation request within 30 days from the date of receipt, means all references to the account must be deleted and completely removed from your credit file.

Insist that a copy of such deletion request be sent to you.

Save your stamped mail receipt.

Keep your receipt that is stamped with the mailing date so it can be used to facilitate a dismissal if legal action is taken against you.

Failure to respond to a validation request is grounds for dismissal if you are sued.

Why it Matters:

If Validation is Received:

If the organization is able to provide the proper documentation as requested, you will have already requested at least 30 days to investigate the information.

During that time all collection activity must cease and desist.

You have the right to research and correct any errors.

Creditors cannot contact you if you’ve requested it in your letter.

This means no contact by:

• Phone, cell phone, through third parties, or email by either an agent or any computer generated source – either at work or at home.

• You can threaten to file suit for harassment.

Going Forward:

Mistakes Matter!

Even small errors can make a difference.

No error is too small to correct.

An error you fail to correct today can turn into a bigger problem later on.

If the debt collector has reported invalid information to any of the three major Credit Bureaus (Equifax, Experian or TransUnion), this could constitute fraud under both Federal and State Laws.

If any negative mark is found on any of your credit reports by the company or the company that is being represented you have grounds to bring legal action against them for the following:

• Violation of the Fair Credit Reporting Act • Violation of the Fair Debt Collection

Practices Act • Defamation of Character

Correct Errors

What’s Next?In most cases, responding promptly and properly to a collection letter will resolve the issue.

If you require further assistance or if the action proceeds further, CLARO can offer you advice and other assistance.

This concludes our slide show on how to respond to a debt collection letter. Additional resources can be found at www.clarobuffalo.org.