8 steps to dispute a false debt claim and win
Have you been wrongly accused of owing a debt?
Creditors often sell debts to collectors. Often rightfully, but at times false claims can happen—because some paperwork goes missing or ends up with errors during the transfer process.
That’s more common than you might think.
In fact, over half of the complaints filed against debt collectors with the Consumer Financial Protection Bureau (CFPB) in 2020 and 2021 concerned false debt claims.
Having a clean credit history doesn't protect you from the risk of a wrongful accusation either.
If your name did show up on the wrong debt notice, don't worry: all you need is knowledge and a game plan. Follow these eight steps to dispute a false debt claim.
Step 1: Gather information
To dispute a debt and win, you need its details. Gather as much information about the debt in question as possible. Try to answer the following:
- Who is the original creditor?
- What is the debt amount?
- What interest and fees were charged?
- When was the debt supposedly incurred?
Not only is it helpful to understand the details of the accusation, but it’s also a requirement for the debt collectors to provide them.
If they can’t, the claim has no legs to stand on.
If the assertion is against a former debt you’ve already paid, gather any evidence proving it’s been cleared. This will likely include records of any communications from the creditor and old bills and statements.
Reconcile precisely what and when everything was paid against your bank statements.
Don’t just rely on the creditor or debt collector’s records. Gather your own backup. The more thorough, the better.
Step 2: Hire a lawyer
It may be prudent to consult an attorney, especially a bankruptcy or consumer rights lawyer. There are several reasons legal counsel can help:
- Knowledge: Specific knowledge of potentially confusing and complex debt law.
- Experience: Attorneys are well-versed in negotiations. They can negotiate directly with creditors on your behalf, potentially concluding a more favorable resolution.
- Accuracy: Using the services of a professional can limit paperwork mistakes and missed deadlines.
- Protection: An attorney with a consumer rights focus can help identify and protect you from aggressive and harassing debt collectors.
- Representation: Should your dispute go to court, hiring an attorney to represent you may be essential.
- Peace of mind: Working with a lawyer will help most people sleep better at night, confident they’re in professional hands.
Step 3: Verify the debt
Consider requesting official debt validation from the collector.
Under the Fair Debt Collection Practices Act (FDCPA), borrowers can request this within 30 days of receiving the debt notice. Collection agencies are obligated under the act to provide you with official, supporting evidence.
Until that time, they must cease all collection activities.
Step 4: Assess your credit report
After you’ve gathered all the pertinent details, consulted with an attorney, and obtained verification from the collection agency, it’s time to assess your credit report.
- Request a report from each of the three major reporting agencies (Equifax, TransUnion, and Experian).
- Look for the debt in question within the gathered reports. Search by amount, date, and the original creditor. The debt may be on all, some, or none of the three reports.
- Check for inaccuracies in the reports. Look for inconsistencies that don’t align with your records. Highlight incorrect amounts or payments deemed “missed” that were paid. All these errors can be used to support your dispute.
- Make a note of any collections accounts on the reports. These typically happen when a creditor sells your debt to a collection agency, believing you haven’t paid the balance you owe and likely won’t.
Step 5: File a dispute
File a dispute with each credit bureau that has a record of the debt. The bureaus are given 30 days to investigate and correct the errors.
As part of the dispute filing, include any supporting backup and make it clear why you believe the debt is not yours. The easier you can make their job, the better.
Step 6: Keep records
Debt disputes can take months or longer, and recalling small but critical details can be challenging. As a result, diligent record-keeping is essential.
As you move through the process, document everything.
Ensure you maintain strict records of any creditor or collection agency communications. Write down the details of phone calls—including the time and date they occurred and the representative you spoke with.
Step 7: Respond to any legal notices
In extreme cases, you may be sued by the debt collector.
It’s imperative to treat the suit seriously and respond quickly. Of course, in this instance, hiring a lawyer is all the more critical.
Failure to respond to a legal notice can have severe consequences, like:
- Bank levies
- Liens against your home
- Wage garnishment
Step 8: Don’t back down
If the accusation is false, it’s critical to never admit to the debt.
In some cases, admission can be considered acknowledgment. Moreover, even if the debt claim is accurate, admission can restart the statute of limitations.
Tying it all together
To dispute a debt and win, it's best to maintain a clear and focused mind.
If a collector comes knocking, remain calm. While it can be scary, remember that you have a powerful arsenal of weapons at your disposal.
Verify the debt, assess your credit report, and file a dispute. As you progress through the dispute, maintain detailed records, treat any legal notices seriously, and most importantly, don't back down.
But above all, seek the advice of an attorney specializing in debt settlement—regardless of whether the claim is legitimate.
Fighting debt collectors can be stressful, and having a specialist on your side can help improve your odds of winning the fight.