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Debt Validation

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I received a letter saying that I owed $4200 on a student loan.  I do not recall this loan and I had all of my loans consolidated years ago, so when this letter came out of the blue I opted to ask for debt validation before I make arrangements to pay.


My request resulted in a copy of a generic bill from the school, clearly printed from the school's computer system, that says:


Internal Snapshot Report


11/18/2008  ALL OTHERS  $4090

11/18/2008 AUX SERV HOUSING-FOOD $48

11/18/2008 STUDENT REC BILL & LATE PY $72

Remaining balance $4210.08


Someone also wrote on the paper "Financial Aid Billed Back".


My question is this, does this letter comply with debt validation? - it doesn't exactly tell me a whole lot of information and while it could be true that I owe for financial aid being billed back in 2008, I don't really understand why I'm just now hearing about it.  I guess I just expected more detail before I dish out $4200 on something that I'm not 100% certain I owe.


Any advice is appreciated.


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Validation is pretty much whatever a creditor coughs up.  Whether they're too late in terms of a statute of limitation from date of breach of contract is something you'd google ("debt collection statute of limitations" and look for your state).

You don't have to make arrangements to pay regardless; you can wait for them to sue you (and, if they're within the relevant statute of limitations, then your tack would be to debate whether you owe X).

Unfortunately, the laws don't require them to pester you in a timely manner.

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My question is this, does this letter comply with debt validation?


Federal law does not regulate the collection activities of the original creditor. It does regulate the collection activities of debt collectors in the federal Fair Debt Collection Practices Act (FDCPA). Under the FDCPA, the collection agency must provide the debtor with verification of the debt if the debtor submits a written request for verification. Specifically, section 809(b ) of the FDCPA states:


(b ) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) 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 any 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.


The statute and the FTC opinions regarding it make it clear that the collector must get verification from the original creditor that includes, at a minimum, the name of the debtor and the amount owed, and provide that to the debtor to meet the verification requirements. Thus, while the requirement is not very demanding, it is not as Fallen suggested “whatever the creditor coughs up.”


So, if it is the orginal creditor that is collecting this debt, federal law does not require verification at all, let alone dictate what the verification must be. If it is a collection agency collecting the debt, then the provisions of the FDCPA discussed above will apply.


Some states have additional laws on debt collection, but as you didn’t specify the state in which you live, no one can provide you any additional information on that.

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The state the debt is from is Michigan, but I currently reside in Illinois.  I have not yet contacted the school because they sent the debt to collections and I assumed I had to deal with the collections agency (I've dealt with this in the past, for a medical bill my insurance rejected, and was basically told that once it goes to collections there is nothing the original owner of the debt can do).  I got the letter and immediately requested validation, which arrived a few days ago.  


I'm not sure how the statute of limitations works, I only know that after a certain point they are no longer allowed to pester me about the debt, but I'm concerned for my credit report.  From what I can find online, in Michigan it seems to be 6 years, but in Illinois, where I currently reside, it is 10 years.  I don't want a judgement to destroy my credit, and I certainly don't want a garnishment, but I'm really unsure as to what this debt is.  I guess my next step is to contact the school and see if they can provide me with any more information, but in the meantime I worry that the collection agency will move forward and try to take me to court before I can verify this debt and make arrangements for it.  I mean, it's $4000 - I kinda want to make 100% certain I owe it before I go writing any checks, and that also brings up another question...


I've heard that if I pay on an old debt I am basically breathing life into it and resetting the statute of limitations, is this true?


I've also heard that if I pay on an old debt anything at all, say I start paying $50/month on a $4000 debt, they can't take me to court to sue me or seek garnishment, is there truth in that?


Also, just out of curiosity, are the statute of limitations limits the ones where the debt originated, or the ones of the state I currently reside in?


Thanks in advance.

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