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What Are Estoppel Letters?

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Let’s be honest. Having a debt in collections can be overwhelming.

Between the phone calls, voicemails, and letters in the mail from debt collectors – it all adds up quickly. Not to mention, a collection on your credit report can tank your credit score.

And just when you think you’re off the hook?

You get a letter about a debt you don’t even recognize. You’re unsure of what to do next. You just know you don’t want to get duped into paying for a debt that doesn’t belong to you.

So, how do estoppel letters factor into all of this? Let’s take a closer look.

What Are Estoppel Letters?

Estoppel letters that are discussed in this article are also referred to as “estoppel by silence letters”. These are letters that you send third-party debt collectors to demand they prove that you owe them money.

For example, an estoppel letter requests documents from the debt collector proving what you owe, who you owe it to, and the repayment terms. They can help you determine if the debt actually belongs to you or if there’s something fishy going on behind the scenes.

Generally, you use estoppel letters when you’ve asked the collector to validate the debt, and they’ve ignored you multiple times.

As a result, an estoppel letter is a way to prevent collection agencies from asserting claims in court because they didn’t provide you with relevant information. In this case, the relevant information would be proof that you owe the debt.

To put it simply:

Just because a bill looks official doesn’t mean it’s yours to pay.

Creditors and collectors are human, and billing mistakes happen. You should never be afraid to get a creditor or bill collector to validate a debt. The worst they can do is make you pay it, which is what they’re already trying to do.

More importantly?

Estoppel letters can be a valuable step to take if the issue ever ends up in court, such as if the debt collector tries to sue you.

When Should You Use an Estoppel Letter?

Estoppel by silence letters are typically a last-ditch effort you use when you’re not sure a debt belongs to you. You typically send one after you’ve been ignored by the debt collector multiple times after seeking debt validation.

If you pay the debt without validating it, you could end up:

  • Paying money you don’t owe
  • Reviving debt past the statute of limitations (the amount of time a creditor can legally come after you for a debt)
  • Falling victim to a debt collection scam

But before sending an estoppel letter, you should ask yourself:

Do I owe this debt?

If you’re unsure, then you’ll want to try to get the debt verified first. This means your first step is to send a debt validation letter. If you receive no response to the debt validation letter and the collectors are still badgering you to pay, then you can choose to follow up with an estoppel letter.

However, if you do owe the debt, then you’re legally responsible for paying it. Neither a debt validation letter nor an estoppel letter will get you off the hook for something you rightfully owe. Thankfully, there are smart ways to manage your debt if this is the case.

Remember:

Estoppel by silence prevents a debt collector from asserting a claim, position, or defense in court when the assertion results from the collector not sharing relevant information.

According to the Fair Debt Collection Practices Act (FDCPA), debt collectors are legally required to verify that you owe a debt.

This means debt collectors are required to provide you with documentation outlining:

  • How much money you owe
  • What creditor the third-party collector is representing
  • Information on how to dispute the debt

If the debt collector doesn’t respond to your debt validation request, they’re in violation of the FDCPA. You can report them to the Consumer Financial Protection Bureau (CFPB), the FTC, or your state’s attorney general.

Also, according to Section 813 of the FDCPA, you can sue the debt collector for up to $1,000.

The important thing to keep in mind with debt collectors is this:

Stay on your toes by saving copies of each document, including any copies of letters you send them. Also, track all communications, including phone calls and voicemails. Detailed record keeping can help you if you need to report the debt collection agency to your attorney general, CFPB, or FTC.

Sample Estoppel by Silence Letter

Use the template below if you need help drafting an estoppel letter.

When you mail your estoppel letter, you should send it via certified mail with the return receipt requested. This allows you to use the return receipt as proof that the debt collectors received your letter.

The certified mailing receipt will provide you with a tracking number that allows you to check the status of your letter.


Date

Your Full Name
Address 

City, State, ZIP

Debt Collector Name
Address
City, State, ZIP

To Whom It May Concern,

I have not heard back from you in over 30 days since my formal written notice of dispute dated August 1, 2022 (copy enclosed), and you have not supplied the demanded proof of the alleged debt.

Under the doctrine of estoppel by silence, Engelhardt v. Gravens (Mo) 281 SW 715, 719, I may presume that no proof of the alleged debt, nor therefore any such debt, in fact, exists.

In a reasonable effort to resolve the matter amicably, I restate my demand for proof of the debt, specifically the alleged contract or other instrument bearing my signature, and proof of your authority in this matter. Absent such evidence, you must terminate this collection action and correct any erroneous reports of this debt as mine.

For the record, I state again:

As I have no account with you, nor am I your customer, nor have I ever entered a contract with you, I must ask you to provide the following information:

  1. Please evidence your authorization under 15 USC 1692(e) and 15 USC 1692(f) in this alleged matter.
  2. What is your authorization of law for your collection of information?
  3. What is your authorization of law for your collection of this alleged debt?
  4. Please evidence your authorization to do business or operate in this state.
  5. Please provide evidence of the alleged debt, including specifically the alleged contract or other instrument bearing my signature.

You have fifteen (15) days from receipt of this notice to respond. Your failure to respond, on point, in writing, hand signed, and promptly will work as a waiver to any of your claims in this matter and will entitle me to presume that you placed this on my credit report(s) in error and that this matter is permanently closed.

Your continued silence in this matter is unacceptable. Either provide the proof or correct the record and remove this invalid debt from all sources you have reported it to.

For the purposes of 15 USC 1692 et seq., this Notice has the same effect as a dispute to the validity of the alleged debt and a dispute to the validity of your claims. This Notice is an attempt to correct your records, and any information received from you will be collected as evidence should further action be necessary. This is a request for information only and is not a statement, election, or waiver of status.

Regards,

Your Signature


Takeaway

When dealing with a third-party debt collector, you should know your rights and how to protect yourself. Estoppel by silence is one tool you can use to push back against aggressive debt collectors.

Estoppel by silence letters essentially say that the debt collector has failed to respond to your requests for information about the debt, and as a result, you presume that the debt is invalid. This letter informs the debt collector that they need to respond to your requests within a certain time frame, or they’ll be considered to have waived their claims.

As a result, an estoppel letter is a way to prevent collection agencies from asserting claims in court because they didn’t provide you with relevant information.

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