Dispute a debt

How to Dispute a Debt Effectively

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In most cases, when a creditor calls you, it is going to be about your debt. There are certain situations where a creditor asks you to repay the debt, but it is not the correct time, amount, or even your debit. You are probably facing financial challenges already, and now you have to dispute a debt that is not even yours.

Still, there is no reason to give up – on the contrary, disputing a debt is not as hard as it might sound and if you do everything as suggested below, the creditor and the debt collector will not be able to take any further action against you. The biggest mistake when disputing a debt is not doing anything at all; as crazy as it seems, some people will rather accept the debt that is not theirs because they are intimidated by the exhausting process of a debt dispute.

Disputing a debt is also the way to go if the debt is yours but the amount suggested is not correct. Why would you agree to double the debt payment, if you already have problems paying the principal anyway?

The FDCPA allows you three different dispute rights the right to contest the debt; the right to verify the debt; and the right to notice of the debt (30 days since you receive a debt collector letter).

While disputing a debt is a process with a few steps, it doesn’t have to be that exhausting if you know your rights and the tools you have at hand. Allow us to guide you through how a debt dispute should look like below.

What Lies In Your Debt

The Initial Validation

The initial thing a debt collection agency has to do (once they have contacted you) is to send you a validation letter within five days of their first call. This letter must include the name of the creditor, amount owed, as well as statement of your right to dispute the debt within the first 30 days from the day you have received it.

If you don’t agree with the suggested information, you should write a letter and send it to the debt collection agency requesting further verification. While they verify the debt, they can’t take any further action against you relating debt collecting. If they fail to provide proof that the debt is yours, any further action against you is not allowed.

The best way to know your rights is to look under FDCPA regulations as well as check out the What Lies In Your Debt program, which is a great source of information and debt disputing tips.

Disputing the Debt

There are a few reasons why you can file a letter of dispute: You have already paid the debt; the debt amount should be less; and the debt is not yours.

If you have already paid the debt, settling the dispute is going to be only a few-step process. You should contact the debt collection agency and provide them with material proof that you have indeed paid off the debt and that no further collecting action can be taken against you.

On the other hand, if you don’t agree with the suggested debt amount you can ask them to provide you with the the date of the debt; calculation method; as well as amount of principles, fees, and interest rates.

Lastly, if the debt is not yours, proof of identity will usually be enough to settle the case. Still, not all creditors agree with your dispute claims, and they have a right to file a suit and take you to court.

What if You Are Taken to Court

Dispute a debt - court

While in most of the cases your dispute letter will be enough to prove that you don’t owe the amount or you have already paid the debt (if it is true, of course), in some cases a creditor will take you to court. If you indeed owe the debt they suggest, we recommend that you pay it before the first court appearance.

If you can’t manage it all at once, you can negotiate an installment payment with your creditor. Disputing a debt in the court for which you know you owe is not a smart decision as it will result in you paying off the debt (or even losing an asset) as well as the expenses of the court process.

On the other hand, if you dispute the debt because it is not yours, you have paid it, or you don’t agree with the sum, we recommend that you go ahead and consult with your legal adviser or an attorney. Another option is to join a program such as What Lies In Your Debt and learn your defense rights. 

What Lies In Your Debt

Disputing a Credit Report Collection

If you have paid off the debt, or it is not yours at all, and you successfully disputed it against the debt collection agency, you still need to remove it from your credit report. Any debt collection is listed on your credit report for the next seven years and is not good for your future loans.

Removing it shouldn’t be hard – in fact, it only takes a few steps. If the debt collection agency fails to verify your debt, you have the right to dispute the credit report claim. In a case where you have successfully paid off the debt, you can ask the collection agency to pay them an additional fee and remove the collection credit report.

If you were in financial hardship and the debt that you acquired was an unfortunate circumstance (that you paid off), you can send in a proposal to the agency or original creditor asking them to remove the collection from your report out of goodwill. This will only work if you have maintained a good credit score until then.

Final Thoughts

Disputing a debt sounds pretty hard and exhausting. However, if the debt collection agency contacts you for a paid debt or the debt that is not yours in the first place, there is no reason to give up. Just follow the above-mentioned steps and protect your FDCPA-ensured rights.

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