Does a debt collector have the right to refuse settlement ifa debtor requests validation of the debt?

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Does a debt collector have the right to refuse settlement ifa debtor requests validation of the debt?

A letter was received to collect debt on a credit card amount that has more than one person on the card. The main signer requests validation of the debt as they never received statements for any purchases in years. When asked for detailed statements, the third party collector states that if he received that information, all settlement offers are off the table. Is that legal?

Asked on August 19, 2011 New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It is legal, because a creditor or their debt collector has no obligation to engage in any settlement discussions whatsoever, or to settle a debt under any terms other than payment in full when due. Since a creditor or its representative does not have to settle a debt, they can refuse to do so, at any time, for any reason. That said:

1) If someone refuses to validate a debt, it may well be a scam--while you have to make your own decision, speaking personally, I would *never* settle an unvalidated debt unless I had independent reason to know it was good and valid (i.e. there is no question whatsoever in mind as to the validity, terms, amount, etc. of the debt) and I'd gladly "give up" the possibility of settlement to validate the debt, especially since--

2) No matter what they say now, they, *of course* could agree to settle the debt later, at any time--there is nothing preventing them changing their mind.


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