Dear Debt Adviser, I have been paying on a charged-off account for the past two years. In the last year, I have not seen this account on my credit report. The creditor contacted me today offering me a settlement. How do I go about requesting proof this belongs to me? I have paid back more than $4,000 and am now afraid it may have been a mistake as I never remembered the account, and my brother has a similar first name. Can I sue for the money I have paid? -- IM
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Dear IM, And I thought I had a bad memory! It's hard to believe you have been shoveling out money for the last two years on a debt you have just now begun to think might not be yours. In truth, I think you have confused debt ownership with credit reporting. You say you've been paying for two years, but the debt hasn't shown up on your credit report for one year. So why would a debt stop showing up on your report? Because it probably has reached the ripe old age of seven years, at which point the Fair Credit Reporting Act says it must disappear -- from your credit report that is. This doesn't change your legal responsibility to repay the debt. Still, I do want you to request proof that the debt is yours.
Requesting that a debt be validated is a critical first step to take when contacted by a creditor, collector or anyone regarding a past due debt. The Fair Debt Collection Practices Act requires that the creditor must provide you with validation of the debt if you make such a request in writing within 30 days of being contacted regarding the debt. Why? Because mistakes happen when tracking down the owner of a debt so old it has been charged off (at least five years old in your case). You skipped this step and have been paying on the account, so your 30-day window has closed. However, you can still make the request for information on the original creditor and verification of the debt. The only difference is you don't have the law to back you up if the creditor denies your request or takes longer than 30 days to comply.
At this point, I suggest you notify the creditor that you aren't sure the debt is yours and that before considering a settlement you want proof you owe the money. If you get proof the debt is yours, then you may want to consider a settlement to get rid of the obligation. Alternatively, because the debt is so old, it may be worth your time to check the statute of limitations in your state for collecting the debt in court. The debt may have expired. You can check to be sure the statute of limitations has expired by visiting nolo.com.
If the debt can't be verified and you want to try to get your money back, all I can say is good luck. You can check with your local bar association (you should be able to find this type of assistance free or for a low cost) for your rights to sue for the money that you have paid if you truly believe the debt is not yours.