Credit Card Guide

What Is Zombie Debt?

21 November 2012 by CreditCardsCo™

As long as there are credit cards there are is going to be debt and debt collectors that go after the consumers for Zombie debt which is debt that has already been paid off, surpassed the statute of limitations, or doesn't even belong to the debtor contacted. Being armed with your rights and the knowledge of what you can do to protect yourself when the harassing phone calls start is your best defense.

Zombie Debt

Zombie debt, sometimes known as Phantom debt, refers to old debts that have been paid off, passed the statute of limitations, or in some cases never actually belonged to the debtor contacted. Debt collectors purchase these debts and harass people in an effort to scare them into paying off debts they may have never personally incurred.

There are various means that can be used to help battle debt collectors that come after you with regards to a zombie debt. Some of the options which debtors have are debt verification, checking the statute of limitations, or making the debt collector cease any contact with the debtor.

Importance Of Debt Verification

Few consumers are actually aware of how vital it is to verify any debts that may be brought against them. The Fair Debt Collection Practices Act, or FDCPA, gives each individual the right to get a letter in writing verifying all details of the debt. This should include any original documents from the original creditor, the amount of the debt currently owed, and proof that the company contacting you has the right to collect monies from you. You must request this information in writing via certified mail with a return receipt requested.

Statute Of Limitations And How To Use It

Knowing exactly what the statute of limitations is in reference to your debts is important. It is defined as the period of time that a debt collector can use the court to force the debtor to pay what is allegedly owed. The statute of limitations starts on the last date of activity on the original account and expires usually between three and six years after the date, sometimes much later depending on the state the debtor currently lives in. Once the statute of limitations has expired, the consumer needs to be careful to not restart it again through making payments, promises of payments, or similar contact to the debt collector.

What To Do When A Debt Collector Contacts You

You answer your phone and the next thing you know you are being informed that you owe a large sum of money to an agency that you never heard of. You hear the words "legal action," "court," or "pay now" and will most likely start to panic. This is what the debt collectors are hoping for. You get a letter in the mail stating the same information and again panic begins to set in. Stop and take a moment, read the fine print, and see if you can locate where the original debt began. With that information in hand, immediately discontinue any interaction with the agency barring the aforementioned debt verification letter. If the phone calls continue, write a formal cease and desist letter to the debt collector to stop further contact, ensuring you do so via certified mail and with a return receipt request included.

In conclusion, when it comes to zombie debts, debt collectors often rely on a vast array of scare tactics to convince consumers to pay up on debts that they have either already paid or are not responsible for. If you are fully informed of all of your rights and how to go about protecting them you could save yourself from the headaches and potential court battles that may accompany zombie debt collectors.

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