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LRC Fundamentals Day 18: Verify Your Debt

LRC Fundamentals Day 18: Verify Your Debt

By TheBudgetnista -  Tags: ,


New to Live Richer Challenge: The Fundamentals? Learn more about it HERE.

Need to catch up? Click on the link where you left off and then come back!

Day 13: Allowance

Day 14: Review, Reflect, Relax

Day 15: Debt List

Day 16: Find Money

Day 17: Debt Repayment

Week 3: Debt

Today’s Easy Financial Task: Call and verify your debt

How to rock this task:

  • Reach out to your debt collectors or wait until they call again
  • When speaking with your debt collectors, do not agree or admit to anything except your name and address
  • Request a Debt Validation Letter verbally and in writing

Yay! You're exactly halfway through the challenge! How do you feel? Awesome I hope. 🙂

Yesterday, I showed you step-by-step how to pay off your debt. Today, I’ll show you how to find out if some of your debt is expired and can no longer be legally collected.

Here’s how:

First, google your state's Statute of Limitations on the type of debt you have. Then, the next time a NON-RECENT debt collector calls you, request a Debt Validation Letter verbally and in writing.


- Unless the collector is from the original company to whom you owed money, you never know who you’re actually speaking with.

-   Your debt may be what’s called “Zombie Debt” and past the Statute of Limitations for collections. Every state allows debt collectors a certain number of years to use the legal avenues available to them to recoup their money from you.

In New Jersey (where I live), the Statute of Limitations on credit card debt is six years. That means that after six years of my (credit card) debt being inactive (the last time I made or promised to make a payment or used my card), the debt collector cannot legally collect from me. Many collectors will try to get you to renew the Statute of Limitations on expired debt by getting you to agree that you owe the debt and to make a payment, no matter how small.

This is why it’s so important not to admit to anything or agree to a payment until you get your Debt Validation Letter. The letter will show you how long your debt has been inactive. If it’s past the Statute of Limitations in your state (Google your state’s Statute of Limitations on debt), although you owe it, the collector cannot legally pursue you. A debt collector may still try to take you to court for “Zombie Debt,” but if you have your Debt Validation Letter from them, it’s your evidence that the debt has expired.

I’m not advocating that you don’t pay what you owe. I just want you to focus on paying off current debt active within the last two years. Current debt has the biggest impact on your credit score, so paying it off will increase your score and help your credit report look better. After handling current debt, if you want to pay off old “Zombie Debt,” then you should.

Afraid of dealing with debt collectors? Here's a post I wrote that will help:9 Ways to Successfully Handle Debt Collectors.

Note: Just because a debt has expired doesn't mean it will come off your credit report. Negative items can stay on your report from 7-10 years depending on what kind of debt it is.

After verbally requesting your Debt Validation Letter, make sure to send your request via certified mail or via fax, for proof of receipt.

Here's a free Debt Validation Letter template for you to use: Debt Validation Letter Template

Don't you feel better? Now that you're learning the rules to the game, you actually have a chance at winning. Share your thoughts about today's task in the comments below and with the Dream Catchers in the LRC Forum.

(If you're new to the Dream Catchers: LIVE RICHER forum make sure to fill out the questionnaire HERE before requesting to join.)

Share your new knowledge with someone else...

If you ask, debt collectors have to verify that you owe them. Yup! Day 18 #LIVERICHERChallenge Click To Tweet

Live richer,


You can reach out to me here:

twitter: @thebudgetnista

instagram: @thebudgetnista

Facebook: The Budgetnista

Private Forum: Dream Catchers : LIVE RICHER

(If you’re new to the Dream Catchers: LIVE RICHER forum make sure to fill out the questionnaire HERE before requesting to join.)


*** Have you just started the Challenge? Want to catch-up? Want to do the challenge again later? Want to work through the LIVE RICHER Challenge in a workbook as well? You can do it ALL with the LRC Book. Get it here NOW: LIVE RICHER Challenge Book ***

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Tiffany “The Budgetnista” Aliche is quickly becoming America's favorite, personal financial educator. The Budgetnista is also an Amazon #1 best selling author (The One Week Budget and Live Richer Challenge), sought-after speaker and teacher of financial empowerment.
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