What if the Creditor is Refusing to Show Validation of the Debt?

 Posted on May 28, 2024 in Bankruptcy

When faced with overwhelming debt, many people look into bankruptcy as a means of obtaining a fresh financial start. However, before filing for bankruptcy, ensure that all debts are valid and accurately reported. If a creditor refuses to provide validation of a debt upon request, it can create a complex situation for the debtor. A Texas lawyer can help you explore the legal implications and potential courses of action when a creditor fails to confirm a debt under the law.

What You Should First Know About Debt Validation

Debt validation is when a creditor proves that a debt is legitimate and belongs to the individual being pursued for payment. Under the Fair Debt Collection Practices Act (FDCPA), a federal law in Texas, consumers have the right to request debt validation from creditors or collectors within 30 days of being contacted about a debt. The creditor must then provide written verification of the debt, including the original creditor’s name, the amount owed, and proof that the debt belongs to the consumer.

Consequences of a Creditor’s Failure to Validate Debt

If a creditor fails to respond to a debt validation request or provides insufficient evidence to substantiate the debt, several legal consequences may follow:

• Cease Collection Efforts: If the creditor cannot validate the debt, they must cease all collection efforts until proper validation is provided.
• Dismissal of Lawsuits: If the creditor has filed a lawsuit against the debtor, failure to validate the debt can result in the dismissal of the case.
• Penalties and Fines: Creditors who violate the FDCPA by failing to validate a debt may face penalties and fines imposed by the court.

Protecting Your Rights as a Debtor

If you have requested debt validation and the creditor has failed to comply, you should take proactive steps to protect your rights:

Document All Communications: Keep detailed records of all communications with the creditor, including dates, times, and the content of conversations or correspondence

• Send a Cease and Desist Letter: Formally notify the creditor in writing that they must stop all collection efforts until proper debt validation is provided.
• File a Complaint: If the creditor continues to harass you or fails to validate the debt, consider filing a complaint with the Texas Attorney General’s Office or the Federal Trade Commission.
• Consult with a Bankruptcy Attorney: If you are considering bankruptcy to resolve your debts, consult an experienced Texas bankruptcy attorney who can guide you through the process and ensure that all debts included in your filing are valid.

The Role of Bankruptcy in Dealing with Unvalidated Debts

Filing for bankruptcy can provide additional protection and leverage when dealing with creditors who refuse to validate debts:

• Automatic Stay: Upon filing for bankruptcy, an automatic stay goes into effect, prohibiting creditors from continuing collection efforts, including those related to unvalidated debts.
• Discharging Unvalidated Debts: If a creditor fails to validate a debt during the bankruptcy proceedings, the court may determine that the debt is invalid and discharge it, eliminating the debtor’s obligation to pay.

Contact a Wise County, TX Bankruptcy Lawyer

Dealing with a creditor who refuses to validate a debt can be a frustrating and stressful experience. However, by understanding your rights under Texas law and taking proactive steps to protect yourself, you can potentially overcome this challenging situation effectively. Working with a Parker County, TX bankruptcy attorney can help ensure that your rights are protected throughout the process and that you achieve the fresh financial start you deserve. Call Acker Warren P.C. at 817-752-9033 to start with a free consultation.