Know Your Rights: Expert Debt Validation Legal Services

Under the Fair Debt Collection Practices Act (FDCPA), debt collectors have to provide you with certain information about your debt, known as validation information. Generally, this information is provided in a written notice sent as the initial communication to you or within five days of their first communication with you, and it may be sent by mail or electronically.

Debt validation is not just a legal right; it’s an important step in ensuring that you are only held accountable for debts that are legitimately yours. It involves a two-way communication process: you requesting verification of the debt and the collector providing validation. This interaction is governed by the Fair Debt Collection Practices Act (FDCPA), which sets the rules for how debt collectors must operate and what they are required to prove. 

 Requesting debt verification is particularly relevant in the following situations:

• Unknown debt claims: If a debt collector contacts you about a debt you don’t recognize, it’s important to request verification. This can happen due to mistaken identity, a clerical error, or fraudulent activity.
• Old debts resurfacing: Sometimes, collectors will attempt to collect on old debts that have already been settled or are past the statute of limitations in your state. Requesting verification ensures you’re not paying for something you no longer owe.
• Discrepancies in debt amount: If the amount the collector claims you owe doesn’t match your records, a verification request can clarify and potentially correct these discrepancies.
• Frequent debt collector changes: When your debt is passed from one collector to another, details can get lost or altered. Verifying the debt each time a new collector contacts you is a good practice.
• After a period of non-communication: If there’s been a long period without communication about a debt and suddenly a collector re-emerges, it’s wise to verify the debt to ensure its legitimacy.

What information is required to be in the validation notice from a debt collector about my debt?

The information helps you recognize whether the debt is yours and, if not, how to dispute it.

• A statement that the communication is from a debt collector
• Your name and mailing information, along with the name and mailing information of the debt collector
• The name of the creditor you owe the debt to
• It is possible that more than one creditor will be listed
• The account number associated with the debt (if any)
• An itemization of the current amount of the debt that reflects interest, fees, payments, and credits since a particular date
• The current amount of the debt when the notice is provided
• Information you can use to reply to the debt collector, such as if you believe the debt is not yours or if the amount is wrong
• An end date for a 30-day period when you can dispute the debt

You may see other information on your notice, but the information listed above generally must be included. If you think a debt collector failed to give you this information, you can submit a complaint to the Consumer Financial Protection Bureau. 

 If a debt collector fails to validate the debt but continues to go after you for payment, you can sue that debt collector in federal or state court. You might be able to get $1,000 per lawsuit plus actual damages, attorneys' fees, and court costs. (15 U.S.C. § 1692k (2024).) Under some state fair debt collection acts, you can get more than $1,000 in statutory damages.

The debt collector might be able to shield itself from liability if it can prove that its acts and omissions were unintentional and in error. But it will have to show that it had a procedure in place to prevent the situation from happening.

The terms debt consolidation and debt settlement are often used interchangeably—but there are some important differences.

Most significantly, debt settlement is a form of debt relief that involves hiring and paying a third-party company to negotiate a lump-sum payment that each of your creditors will accept in lieu of paying the total outstanding balance. These settlement companies typically charge a fee between 15% and 20% of the total debt amount.

In contrast, debt consolidation requires the borrower to pay their full debt balances using funds from a new loan. Unless there are origination fees or other administrative fees, borrowers don’t have to pay anyone to complete the consolidation process.

Instead, the debt consolidation process requires borrowers to take inventory of their debts and develop a plan to pay them off in a more streamlined—often less expensive—way.

When consolidating debt, a borrower applies for a new loan, balance transfer credit card or other consolidation tool through their bank or another lender. In the case of a debt consolidation loan, the lender may pay off the borrower’s other debts directly—or the borrower will take the cash and pay off his or her outstanding balances.

Whether a borrower should choose a balance transfer card or personal loan to consolidate credit card debt comes down to the interest rates offered and which repayment arrangement is best for their budget.

Once the borrower’s preexisting debts are paid off with the new funds, the borrower will make a single payment on the new loan each month. While debt consolidation may lower the amount a borrower owes each month, it accomplishes this by extending the loan period of the consolidated loans. Consolidating debts also streamlines payments and makes it easier to manage finances—especially for borrowers who struggle to manage their money.