Credit validation

Debt collectors routinely try to collect on debts that they know would not be enforceable in court. They may even try to get you to restart the debt by making a partial payment or by transferring the old debt to a new credit card. But, in a lawsuit settlement with one of the biggest debt collectors, the FTC lets the debt collection industry know that collecting on expired, or time-barred debts, is not ok.

The FTC sued Asset Acceptance, a company who might be listed on your credit report, following allegations that the company violated several rules including: telling consumers they owed debt that the collector may not have been able to prove, failing to tell consumers that their debts were past the statute of limitations, and failing to tell consumers that a partial payment would extend the statute of limitations.

In addition to a civil penalty of $2.5 million, Asset Acceptance has agreed to inform consumers when their debts are too old to be legally enforceable and to let consumers know that a partial payment would essentially restart the statute of limitations on that account. Asset Acceptance also has to inform consumers when they’ve placed a negative account on the consumer’s credit report.

While a judge hasn’t signed off the terms of the settlement, they set a precedent for what the FTC expects of the collection industry. The agency has also released a new publication, “Time-Barred Debts: Understanding Your Rights When It Comes to Old Debts,” to help consumers better understand what to do about old debts.

You may know that the statute of limitations varies by states. It’s generally between Read more…

During the process of credit repair, you may encounter a call (or several) from a debt collector trying to collect on a debt you may not be familiar with or you are not ready to deal with the present time. A powerful and effective tool for dealing with such a scenario is to request a debt validation letter. Making this request is within your right and also protects you from a potentially fraudulent scenario.

What is a Debt Validation?

Debt validation is a legal process which is part of the Fair Debt Collection Practices Act. Debt validation is a request made by a consumer to the creditor asking for proof that the collection agent making content has been assigned to collect the debt. It also helps to establish the total amount you owe as per the original creditor. Read more…

You’ve put forth a lot of work in repairing your credit. You have filed your disputes with the credit reporting bureaus. You figure you have it all taken care of until weeks pass by and you have received no reply from the credit bureaus.

Credit bureaus have the legal obligation to reply to your correspondence within a 30 day time frame. The Fair Credit Reporting Act states that the bureaus must have their investigation completed on your behalf within four weeks. In some cases things do not go as planned. So what do you do now? Read more…