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How to Dispute a Debt and Win

Sarah Edwards | January 11, 2024

Edited by Hannah Locklear

Summary: Follow these four steps to dispute a debt: assemble all documentation about the debt, review the debt collection notice for mistakes, send a Debt Validation Letter to force them to verify the debt, and wait for a response from the debt collection agency.

Chances are that you have some type of debt. Whether it’s an auto loan, credit card, mortgage, student loan, or an unpaid medical bill, you likely owe someone money.

Owing money isn’t an issue if you make regular payments on your debts. As long as you comply with the terms of your agreement with your creditor, you’re unlikely to find yourself on the wrong end of a debt lawsuit. However, problems arise if you stop making payments or if a debt collector wrongly accuses you of owing a debt.

If a creditor or debt collector singles you out for collection, you’ll need to take specific steps to protect your rights and prevent further legal action. This article will discuss the proper steps to take if you need to dispute a debt.

Dispute your debt and win.

What is a creditor legally required to do if you dispute a debt?

If you have disputed a debt, a creditor and its debt collectors must stop contacting you. This is outlined in US federal law under section § 809(b) of the Fair Debt Collection Practices Act, which states:

“(b) Disputed debts If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.”

In other words, if you write to a debt collector within 30 days of their initial notice saying that you don't think you owe the full amount or that you want to know who you originally owed the money to, the debt collector has to stop trying to collect the money until they can prove that you actually owe it.

They need to send you evidence or the name and address of the original creditor. During those 30 days, they can still communicate with you and try to collect the debt, but they can't ignore your request or make it hard for you to dispute the debt or find out who you owe.

Follow these 4 steps to dispute a debt

With that in mind, here is how to dispute a debt in four simple steps:

  • Assemble documentation about the debt.
  • Review the debt collection notice from mistakes.
  • Dispute the debt by sending a Debt Validation Letter.
  • Wait for a response from the debt collection agency.

Now, let’s take a closer look at each of these steps.

1. Assemble all documentation about the debt

Your first step is to assemble all evidence you have concerning the debt. Gather all of your old billing statements and any communications from creditors. Determine the exact amount you owe and how long it’s been since you made a payment.

Gathering documentation gives you clear insight into the status of your debt as you see it. If you believe you’ve previously paid off the debt, you’ll have evidence of a canceled check or bank statement noting the payment.

You’ll want to compare the debt collection letter with your documentation to ensure it lines up. If the amounts owing are different than your records, or other evidence is unclear, you may have a valid dispute.

It’s not uncommon for creditors to mix up consumer information, especially if they resell old debts to collection agencies. A collection agency often purchases thousands of old debt accounts at a low price and uses the records they obtain to chase after debtors.

It’s possible that the documentation they have concerning your debt is inaccurate or that the debt is someone else’s.

2. Review the debt collection notice for mistakes

All debt collectors must follow specific guidelines when attempting to collect consumer debt.

In their initial written contact with a debtor, they must send a letter that contains specific information concerning the debt. Details they must include are:

  • The full name and contact information of the debtor
  • The original creditor and account number
  • The amount the debtor owes
  • Contact information of the debt collection agency
  • Disclosure allows the debtor 30 days to dispute the debt or ask for further validation

You should compare the initial communication from the debt collection agency with your documentation. Ensure that their contact information is accurate and you recognize the original creditor's name. You should also compare the amount due to your records.

3. Dispute the debt by sending a Debt Validation Letter

After comparing the notification with your records, you can file a dispute or ask for further verification of the debt.

A dispute is appropriate if you have hard evidence that clearly shows the debt doesn’t belong to you, was already paid, or if the amount due is incorrect. The more information you can provide to the debt collection agency concerning the dispute, the better.

Once a debt collection agency reviews your support, they can dispute your claim or adjust theirs. If your documentation isn’t enough to dissolve their claim, they’ll likely continue collection activities against you.

You can submit a formal debt validation request if you don’t feel the information provided is enough to prove the debt is yours. Do this by sending a Debt Validation Letter. The debt collection agency will need to gather additional information to verify their claim, such as an assignment letter from your original creditor and details of your prior account history.

Check out this video to learn more about how a Debt Validation Letter can help you fight off debt collectors:

4. Wait for a response from the debt collection agency

Under the rules established by the FDCPA, the debt collection agency must respond to your dispute or request for additional verification.

If time goes by and you receive no response from the debt collector, you’ve successfully stopped further collections. Either the information you provided in your dispute was enough to clear the debt, or the collection agency doesn’t have enough evidence to validate it further.

However, it is essential to monitor your credit report following communications with a debt collection agency. Sometimes, collection companies will make your life harder by continuing to report the debt to credit bureaus, which can decrease your credit score.

If you find that collection agencies are still reporting an old debt you’ve disputed, you can file a Complaint with the credit bureau to remove the reporting. You’ll want to provide evidence of your dispute or request for further verification. Let the credit agencies know you never received any other communication from the collections company.

When should I dispute a debt?

You should dispute any debt you disagree with or can’t reconcile with your records. It’s not uncommon for creditors and debt collection agencies to make mistakes, especially when handling thousands of accounts daily.

You don’t automatically owe money to anyone who sends you a notice trying to collect a debt. You’re well within your rights if you decide to dispute it or ask for further verification.

Here are some common reasons you should dispute a debt:

  • You do not owe the debt;
  • You do not recognize the debt;
  • You are a victim of identity theft;
  • The debt has been paid;
  • You never received the item or service for which you were charged;
  • The debt is past the statute of limitations.

Below, we break down each of these reasons in detail.

You don’t believe the debt is yours

Sometimes, debt collectors mix up consumer information. When errors occur, they contact the wrong people seeking to collect a debt that they don’t owe.

If you don’t recognize the name of the debt collector or the original creditor, you have a valid dispute. The debt collection request may be an internal error or a mistake that happened when the collection agency purchased the debt.

You have paid off the debt

Sometimes, you pay off a debt, only to get a notification from a debt collection agency seeking to pursue you for the same obligation.

For example, you may make a payment to your original creditor to pay off debt while they are in the process of selling debts to a collection agency. The collection agency that purchases the debt may not receive a transaction record, and they’ll attempt to collect it with the incorrect information they have.

Other times, a creditor may not update their records to include your payment. As months go by, they decide to sell outstanding debts to a collection agency, and yours comes up, even though you’ve already paid it.

To convince the collection you’ve paid the debt, simply send them a copy of the bank transaction. They should stop all future collection activities against you unless there is a further discrepancy.

Someone stole your identity and created an account in your name

Identity theft is another common reason for disputing a debt. Scammers are everywhere, and the worst will try to steal your personal information so they can obtain funding in your name.

Some people don’t realize they are the victims of identity theft for years until a debt collector reaches out to them to collect a debt they don’t recognize. Others learn of identity theft when they’re unexpectedly turned down for a line of credit or mortgage.

Consumers should keep a close eye on their credit reports and notify the credit bureaus if there is new activity they don’t recognize. If a new loan appears on their credit report they haven’t applied for, the individual should notify the creditor and file a Complaint with the Federal Trade Commission.

If you receive a letter from a debt collection agency concerning a loan you didn’t take out, provide the agency with a copy of the reports you’ve made concerning identity theft. The debt collection agency must stop further adverse reporting against you until the Federal Trade Commission confirms your Complaint.

Steps to take if the debt collection agency doesn’t accept your dispute

You’ll know that a debt collector refuses to accept your argument if they continue to contact you or send you a letter stating that your dispute is invalid. If they continue collection activities, you have several alternatives.

You can file a claim with the Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB) handles consumer Complaints concerning debt collection agencies. If you’ve disputed your debt and the debt collection agency declines to accept your dispute, you can file a Complaint with the CFPB. The CFPB will follow up on your Complaint and attempt to resolve the issue with the collection agency on your behalf.

Send a copy of your debt dispute to the CFPB here:

Consumer Financial Protection Bureau
P.O. Box 27170
Washington, DC 20038

You can file a Complaint with the Better Business Bureau

The Better Business Bureau (BBB) maintains a registry of businesses nationwide. Individuals who feel a debt collection agency is acting against their interests can file a Complaint, and the BBB will notify the debt collector. The BBB has specific actions it can take against a business once it receives a Complaint.

Usually, the BBB will attempt to resolve the issue between both parties. If a resolution is not possible, they may recommend arbitration or mediation.

Complaints are publicly viewable by other consumers and businesses until resolution. Most debt collection agencies don’t want a negative BBB report since it can hurt their business. They’re more likely to resolve Complaints in your favor to avoid a bad rating or further investigation of the company.

Respond to your debt lawsuit

If you’ve been sued for a debt, the best way to beat collectors in court is to respond to the lawsuit and stand up for your rights. Make sure to respond with a written Answer before your state’s deadline.

Follow these steps to make your Answer to a debt collection lawsuit:

  1. Respond to each claim listed on the Complaint.
  2. Assert your affirmative defenses.
  3. File the Answer with the court, and send a copy to the opposing party.

SoloSuit can help you draft and file an Answer in all 50 states.

Check out this video to learn more about these three steps:

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