You’ve just received a letter from a debt collector demanding that you pay a debt that’s years old. Perhaps you don’t even remember the debt. What’s the best way to handle this situation?
Why am I being contacted about an old debt?
First let me explain why a collection agency is probably contacting you out of the blue about an old debt. More than likely this was an old debt such as an old phone bill or medical bill that was recently sold to a new collection agency.
Collection agencies will many times buy the right to collect on a debt for pennies on the dollar from original creditors, or even other collection agencies that have been unsuccessful in collecting the debt. Once they purchase the right to collect on the debt, they’ll start contacting you in order to collect on the original amount (or more) in order to turn a profit on their purchase.
How to respond to the debt collector
First of all, if they call you rather than send you a letter, simply tell them to send you everything in writing and hang up the phone. Under no circumstances should you pay them over the phone or give them access to your bank account. You’ll wake up one day and find your bank account cleaned out.
When you have a collection letter in hand from the collector you’re ready to respond. The first step is to respond with what’s called a Debt Validation Letter. Simply put, it’s a letter that demands that the collector send you documentation that proves that you actually owe the debt. This is usually documentation from the original creditor.
The thing is, since this is an old debt that’s probably been bought and sold by several debt collectors, it’s going to be more difficult for the collector to actually validate the debt.
When you use this technique, I’d say more often than not they’ll simply stop trying to collect the debt because they can’t validate it. I’ve personally used this letter to stop a collector from collecting on an old debt. In addition, using this letter I was also able to get the collection removed from my credit report.
What a debt validation letter looks like
In the debt validation letter you are basically requesting that they provide you with documentation showing that you actually owe the debt. In addition, you should also state they if they are unable to provide the documentation, to not only stop attempting to collect the debt, but to also remove the negative entry from your credit report.
One thing to keep in mind is that you only have 30 days to get this letter to them from the time they contact you.
Sample Debt Validation Letter
I wouldn’t copy this letter word for word, but I’m providing it to you as a template to help you get started. You should change it to fit your specific situation.
[original creditor or name of collection agency if account was sold]
[creditor address] RE: [account ex: Citibank Mastercard] account # [full account number]
(if contacting a collection agency include the original acc. number, i.e., the Mastercard number in this case, and also include any acc. number assigned by the collection agency –this number would be on one of your collection letters)
I am formally requesting that you validate all notations you have submitted to the three major credit reporting agencies by [name of collection agency or original creditor] for me, [your name], for account number XXXXXXXXX.
Due to possible inaccuracies in these credit reporting agency reports, I must demand that the validation I hereby lawfully request be in the form of a notarized statement by a person with original knowledge of the debt as it was constituted and who can testify that the debt was incurred legally.
Please know that you have 30 days from the tracked and confirmed delivery of this notice to either answer these demands or to remove the associated negative trade line notations from the credit reporting agency reports.
Address City, STATE ZIP
Have a professional remove the collection
Lastly, if you’re the type of person who would rather just get your credit cleaned up quickly and be done with the whole thing, I suggest you check out Credit Saint. They’ll take care of you. Check out their website.