How To Dispute a Debt You Don’t Owe in 4 Simple Steps

Getting contacted about a debt you don’t owe is frustrating. You have the right to dispute it. Consumer debts often get reported incorrectly to the three major credit bureaus. You need to check your credit report and take action.

Follow these four steps to dispute a debt:

• Validate the debt
• Send a dispute letter
• Check your credit report for errors
• Follow up until resolved

Why Am I Being Contacted About a Debt I Don’t Owe?

Medical bills and credit card debt can fall behind. The original creditor will try to collect first. If the account stays delinquent, they charge it off. They sell it to a third-party collection agency.

Unpaid accounts get bought and sold frequently. Mistakes happen often. People get contacted about debts they don’t owe all the time. You can dispute the debt with the creditor or collector. You can also dispute with any credit reporting agency showing wrong information.

How To Dispute a Debt With Creditors and Debt Collectors

Disputing a debt is straightforward. The process has clear steps. You need to act quickly to protect your rights.

Step 1: Validate the Debt

Make sure the company validates the debt first. Debt validation is required by law for third-party collectors. Mistakes are common in debt collection.

Verifying the debt confirms it’s actually yours. It confirms the debt is still collectible.

Debt Validation and Your Legal Rights

Third-party debt collectors must send a validation letter. They must send it before first contact or within five days. Federal law requires this.

The debt validation letter includes:

• The amount you allegedly owe
• The collector’s contact information
• Your right to dispute the debt

You have 30 days to request verification or dispute it. The collector must stop collection efforts during this time. After 30 days, you can still dispute. But the collector can continue contacting you.

Step 2: How To Write a Debt Dispute Letter

Notify the debt collector that you dispute the debt. You have several options:

• Fill out the tear-off form from the validation notice
• Draft a dispute letter
• Do both for more detailed disputes

How To Use the Tear-Off Form

Debt collectors must include a tear-off portion on validation forms. You can use this to easily dispute the debt. Cut the “How do you want to respond?” section from the letter.

Check the appropriate box:

• This is not my debt. The collector wrongly identified you as the owner. Check this if the debt was never yours.
• The amount is wrong. You recognize the debt but the amount is incorrect. Provide documents showing the actual amount. Include proof of past payments or settlement agreements.
• Other. You already paid the debt or have other reasons. Send additional documentation to support your claim. A dispute letter helps explain your situation.

How To Write a Dispute Letter

Write a dispute letter if the validation letter didn’t include a form. You can also write one if you need more space to explain. You can combine this with a debt verification letter.

You can request additional information without disputing the debt. But if you’re unsure about the information, dispute it. Don’t allow the collector to assume they’re correct.

Your letter notifies the collector that you dispute the debt. Explain why you dispute it. Request additional information that wasn’t in the validation letter.

For old debts, ask if it’s past your state’s statute of limitations. If it is, the collector can’t sue you. A cease and desist letter may be your next step.

Dispute Letter Template

Use this sample letter as a starting point. Customize the bold text for your situation. Remember, this isn’t legal advice.

[Your Name]
[Your Address]
[Your City, State, Zip Code]
[Date]

[Collection Company Name]
[Street Address]
[City, State, Zip Code]

Your company contacted me about an alleged debt on [date of contact]. I do not believe I owe this debt because [provide a brief explanation you can back up with documentation].

Please provide the following information in writing:

• The alleged debt amount
• The creditor’s name and mailing address
• Documentation proving I’m responsible for this debt
• Documentation showing you’re licensed to collect debts in [your state]

Since I am sending this letter within the 30-day dispute period, you must stop all collection action. You must stop until this dispute is resolved. Continued collection efforts violate the Fair Debt Collection Practices Act. I will file a complaint in response to illegal behavior.

Sincerely,

[SIGNATURE]
[Your name]
[Date]

Dispute Letter Best Practices

Modify the letter to reflect your situation. Be as specific as possible about why you don’t owe the debt. Avoid giving unnecessary personal information.

Saying “I don’t believe I owe this debt” isn’t enough. Explain why. Here are examples:

• I’ve never had an account with this creditor
• You’ve confused me with someone else
• I already paid this debt (attach canceled check)
• Bankruptcy discharged this debt (attach discharge order)

Include your name and contact information. Include account or reference numbers from the validation letter. Don’t include information that wasn’t in the validation letter.

Send the letter by certified mail with return receipt requested. You can verify the letter was received. Make copies of the letter and all correspondence.

Step 3: Check Your Credit Report and Send a Credit Dispute Letter

Collectors who contact you with wrong information likely reported it to credit bureaus. Your credit report probably has incorrect information about missed payments or collections. Incorrect information hurts your credit score. You have the right to dispute it and have it removed.

How To Review Your Credit Report

Request an updated copy of your credit report. You’re entitled to a free copy from all three major bureaus every year. Get your free credit report from AnnualCreditReport.com. The federal government authorized this official site.

Review all three credit reports from Equifax, TransUnion, and Experian. They’re supposed to report the same information. But they don’t always match.

Look for any inaccurate information when reviewing reports. Unrecognized accounts may indicate identity theft. Review collection accounts carefully to verify their validity and accuracy.

How To Dispute Collections on Your Credit Report

Each credit report includes information on the dispute process. You can dispute by mail, phone, or online.

The three major bureaus allow online dispute filing. Sending a dispute letter may be more beneficial though. Certified mail gives you a record of your dispute. You can prove when you submitted it.

The Consumer Financial Protection Bureau has excellent information about disputing errors. The CFPB has a free dispute letter template.

Once you dispute, the bureau must investigate the validity. Investigation may complete in 30-45 days. Sometimes it takes longer. The disputed debt won’t affect your credit score during investigation.

If you need help creating a payment plan to manage verified debts, our partner Cambridge Credit Counseling can help you reduce payments and lower interest rates.

Know Your Rights

Two federal laws protect consumers regarding debt and credit reporting.

The Fair Debt Collection Practices Act (FDCPA) regulates third-party debt collectors. The FDCPA protects consumers from abusive and unfair practices.

The Fair Credit Reporting Act (FCRA) requires truthful and accurate credit report information. The credit reporting agency and creditor must remove inaccurate information. They may face penalties if they don’t.

If an agency violated these laws, you can:

• File a complaint with the Consumer Financial Protection Bureau
• File a complaint with the Federal Trade Commission

What Happens After You Dispute a Debt Collection?

The debt collector and credit bureaus must investigate your claim once you dispute.

If you dispute within 30 days of receiving validation notice, the collector must stop all collection efforts. They can’t call, send letters, or take legal action. They must wait until they verify the debt.

If the collector can’t verify the debt, they must remove it. They must stop reporting it to credit bureaus. If the debt was on your credit report, it should be deleted.

If the collector provides proper documentation, they can resume collection. You still have options in that case. You may be able to:

• Negotiate a settlement
• Set up a payment plan
• Check if the debt is past the statute of limitations

Disputing a debt won’t always make it disappear. It can stop inaccurate collections from damaging your credit. If your dispute is denied and you believe it’s incorrect, request additional proof. Escalate your complaint to the CFPB or your state’s attorney general office.