Zombie Debt

Imagine having a stable financial life, clearing all your debts, and having nothing to worry about. Suddenly, you get a letter saying you have a debt that needs to be paid off. This would haunt and scare you. This is called zombie debt. 

Zombie debt is debt that has fallen off your credit report, but someone is still trying to collect it for various reasons.  Zombie debt is usually long forgotten and has probably been written off as uncollectible. Still, it can arise if debt collectors attempt to collect it all over again, even when the debt is too old to pursue legally. Zombie Debt is a debt that is usually over three years old and has either been forgotten about, already paid off, or belonged to someone else. It can also result from identity theft or a scammer trying to collect on a debt that does not exist. The original creditor will likely have given up on the debt and sold it to a debt collection agency. These debt collection agencies can be immoral and often make harassing and threatening phone calls.

A statute of limitations exists on how long a lender can collect a debt from an individual. Usually, it is three to six years in most states and even shorter in other states. While the debt is still considered to be important after the statute of limitations has passed, an individual is not legally required to pay it. Although debt collectors cannot take you to court to collect on zombie debts, they may be allowed to contact you to collect on these debts. Because the cost to purchase expired debt is often low, zombie collectors only need a few people to repay their debts to be profitable. Individuals on the receiving end of these efforts must be careful. They should be aware that repaying an uncollectible debt would be no benefit because paying for it again would restart the statute of limitations and put the debt back on their credit report. The debt collector can then take you to the court to collect on that debt.

To resolve a zombie debt, individuals should make it a habit to check their credit reports regularly for negative items to minimize the risk of overlooking a debt. This can also help them catch instances of fraud in case someone has bought something on credit in their name. Your credit report will tell you which lines of credit have been opened and which have been closed. If something looks unfamiliar, you can contact the concerned agencies to make sure a fraudster hasn’t opened any accounts in your name. 

If someone is trying to collect a zombie debt from you, there are ways to tackle it. You can validate the debt by asking the respective debt collector to send you a debt validation letter. This letter provides evidence that you owe money to the debt collector, how much you owe, and who the original creditor is. Then, you can check this letter against your records in your credit report to ensure that the debt belongs to you and isn’t uncollectible. Furthermore, debtors can protect themselves from harassment under the Fair Debt Collection Practices Act (FDCPA). If the zombie debt is a legitimate debt you have already cleared, you can write a letter to the debt collector, asking them to stop contacting you. The debt collector will have to abide by this because of the FDCPA. If you think you never owed a debt to the debt collector, write a letter to the debt collector challenging its validity. After this, the debt collector has to cease all contact with you until and unless they can prove that the debt is yours. Ensure you do this within 30 days after the collector first contacts you. 

The bottom line is that it is essential to keep track of your credit reports to see which accounts you have cleared and which ones need to be cleared. Moreover, do not get scared when surprised by a letter for unresolved debt from the past. You don’t need to let this zombie debt haunt you forever.