Tag Archive for: zombie debt

What is Zombie Debt? What to Do If I’m Contacted?

If you’re struggling with debt, the last thing you need is to hear from some unknown company about a debt you didn’t know existed. But this has started happening with greater frequency now that some unscrupulous businesses are “buying” old debts so they can pursue collections. The term for this is “zombie debt,” and the companies are often called debt scavengers. Here’s what you need to know about it and what you should do if you are contacted. 

What is Zombie Debt and Do You Owe It?

Zombie debt is debt that is supposed to be dead, but it shows back up on your doorstep. When you least expect it, you receive a letter, phone call, or some other communication from a business or debt collector demanding money. Zombie debt can include things like:

  • Debts you previously resolved with the creditor or a debt collector
  • Debts that are past their statute of limitations, meaning you can no longer be sued for the money
  • Debts resolved through bankruptcy

Some zombie debt might even be completely fraudulent. These debts can result from identity theft, or the debt collectors might be scammers themselves trying to steal your personal information and money. 

Tactics Used by Zombie Debt Collectors

Debt scavengers or zombie debt collectors often use questionable or illegal tactics to entice consumers to pay old or non-existent debts. Their goal is usually to trick you into making a payment on a debt you don’t owe. By doing this, you might re-set an expired statute of limitations on the debt, which allows the collector to sue you to collect the entire debt. 

Some tactics zombie debt collectors might use include:

  • Promising to “go away” after you make a small payment — Zombie debt collectors will often vow to leave you alone if you make a small payment on the outstanding debt. Of course, this is a lie. Making a payment could reset the statute of limitations or even be an admission that a non-existent debt is yours. 
  • Promising not to report the debt on your credit report — If a creditor sends your delinquent or charged-off debt to a collector, this can remain on your credit report for over seven years. If that period has passed, the creditor can’t report the debt as “new” to get it re-listed on your credit report.
  • Threatening to sue you for the debt — Some collectors will threaten to sue over debt or even falsely represent themselves as a law firm to scare you into paying. 
  • Engaging in harassment or verbal abuse — Zombie debt collectors often verbally abuse and harass innocent consumers using offensive and abusive language in violation of the federal Fair Debt Collection Practices Act (FDCPA). 

It’s not uncommon for debt scavengers to lie and attempt to coerce consumers into making debt payments for money they don’t owe. If you suspect you’ve been contacted by one of these companies, use extreme caution. 

What to Do If You’re Contacted About Zombie Debt

If a collector contacts you about a debt you don’t believe you owe or one that’s old, you need to protect yourself. Here are some ways you can deal with zombie debt and protect yourself from unnecessary harassment. 

1. Maintain Accurate Records

Keep detailed records of all your debt payments and settlements. Having this documentation on hand can be vital if you need to dispute a debt in the future. 

2. Monitor Your Credit Report

Regularly monitoring your credit is a good way to combat claims by debt scavengers. When someone calls and tells you that you owe money, make them prove it. You can get a free credit report annually from each of the three major credit bureaus. 

3. Know Your Rights

When a debt collector calls you out of the blue demanding money, you aren’t necessarily obligated to pay. Many of these companies purchase these debts via computer files with no other documentation. Under the FDCPA, you have the right to demand debt validation. If the collector can’t provide you with the original creditor’s name, the exact amount due, and a copy of the agreement between you and the original creditor, you don’t owe anything. 

4. Understand the Statute of Limitations

The statute of limitations for debt varies by state. However, this time limit in at least 20 U.S. states is six years or less. If the debt is older than your state’s statute of limitations, you no longer owe it. 

5. Get Legal Assistance

Getting contacted about zombie debt can be stressful. If you have other unmanageable debt, it may be worthwhile to speak with a knowledgeable attorney about the benefits of bankruptcy protection. 

Bottom line: Stale or “zombie” debt is always something that can crop up. It’s important to understand your rights and have a bankruptcy attorney you can trust who can guide your choices. Gulf Coast Bankruptcy Attorney is dedicated to providing readers with helpful information about dealing with financial struggles so they can make the most informed decisions about their financial future.