What Is Zombie Debt and How to Deal With It?

You have probably heard of the term zombie debt, but what exactly is zombie debt? It’s any type of unpaid debt that has been turned over to a third-party collection agency after the statute of limitations has expired.

In other words, the original creditor may no longer be able to sue you in court for this particular amount, but they can still send it to an outside party who will try to collect it. Generally, such debt is very old, usually around 3-6 years, sometimes longer. It all depends on what state you are from. The best way to solve it is to pay it off.

How Does Zombie Debt Work?

Zombie debt is a term used to describe old debt that has been charged off by a creditor but continues to haunt you. This debt can be old credit card debt, medical bills, or student loans.

It can also be a result of identity theft (someone stealing your identity and opening accounts under your name). Zombie debts are not legally enforceable because they have been written off by the creditor, but this doesn’t mean that third-party collectors won’t try to collect maximum amounts from you!

Zombie collection agencies buy up old debts from original creditors at pennies on the dollar (for example, 90 cents on every dollar they originally charged). In some cases, these agencies do not even know if an account is genuine or not.

Then they call consumers claiming they owe money on these accounts and demand payment right away. If consumers don’t pay up themselves outright, then things get ugly very quickly with threats of legal action leading into courtrooms where judges tend not to favor consumers over companies selling services that were never requested in the first place.

What Should You Know About Zombie Debt Collectors?

Zombie debt collectors are usually companies that buy up old debts from lenders and then try to collect them themselves without any legal authority because they aren’t licensed by your state government or even allowed by law.

They often use aggressive methods such as calling you at all times of day or night and sending letters asking for payments, even if those letters contain false information about how much you owe or where your payments should go (and there can be big penalties if these details are wrong).

These agencies are trying to collect debts that don’t even exist anymore because they’ve been written off as noncollectable due to their age (the statute limit varies by state).

These debt collection agencies are not regulated by the government and are not required to abide by the Fair Debt Collection Practices Act.

This means that a zombie debt collector may try to collect debts that are beyond the statute of limitations, which prevents consumers from being sued or taken to court over unpaid bills.

Zombies also don’t need to give notice before they start calling you and sending letters in an attempt to collect your debts.

There are two main types of people who work at zombie debt collection agencies: those who simply want their salary at any cost and those who want revenge against their targets because they feel cheated out of money owed them by someone else (or perhaps both).

Zombie debt is a real thing and can be a serious problem for anyone who gets caught up in it. But with the right knowledge and information, you can fight back against these debts that won’t die. These type of collectors are ruthless people who will stop at nothing to get what they want, but if you know how to handle yourself when dealing with them, then there’s no reason why you shouldn’t come out on top.

What Types of Debts Do Zombie Debt Collectors Attempt to Collect?

Zombie debt collectors have been known to attempt to collect a wide array of debts, including credit cards, student loans, medical debt, and tax debt. They may also try to collect on debts owed to collection agencies or banks for mortgages and other loans.

But how to determine if a debt is zombie debt? There are four types that are classified as zombie debt:

• Settled debts: These are debts you and the lender agreed to bury for good, whether through bankruptcy or another revenue.
  
• Time-Barred Debts: These stay on your credit report, but collectors aren’t allowed to sue you after a period of time. But if you make a payment, it will reset the clock.
  
• Debts that fall off your credit report: Unpaid debts, after seven years, fall off your credit report, but collectors can still haunt you with them.
  
• Identity theft: Debts that are not even yours. Be aware of this. You are not responsible for paying a debt that is not yours.

Regardless of the type of zombie account you may had in the past, if you are contacted by a zombie collector, it’s important that you know your rights under the Fair Debt Collection Practices Act (FDCPA).

How to Deal with Zombie Debt for Good

How to stop zombie debt, and how to protect yourself from zombie debt collectors? The best way to deal with this debt is to make sure it doesn’t happen in the first place. The easiest way to do this is by not ignoring your bills, no matter how tempting it may be at the time.

Once you have a bill, check the statute of limitations, and make sure you keep track of all payments made on that account. If you are experiencing difficulties paying a particular bill, contact the creditor immediately and ask for assistance in negotiating a payment plan or making arrangements for alternative methods of payment, and don’t ignore them either.

If collectors are calling you or sending notices in an attempt to collect on past-due accounts, check out what legal protections exist under each state’s statute of limitations laws before taking any action against these entities. On the other hand, if the statute of limitations has expired, write a letter to a collection agency.

Not only will that letter tell them to back off, but it will also request an investigation under the FCRA and request them to remove zombie debt from a credit report.

These laws vary widely from one state’s laws regarding credit reporting agencies’ ability to post negative information about unpaid debts for longer periods than other types of creditors. Some states even have statutes limiting how long after a death an agency can try to collect outstanding debts owed by deceased persons.

This debt can be a serious problem for people with disabilities and the elderly. These individuals, who often have a hard time keeping track of their financial affairs, are often targeted by these collectors because they are unlikely to challenge the validity of an old debt.

While there are some things you can do if you’re being harassed by zombie debt collectors, such as filing complaints with the FTC and your state Attorney General’s Office, you should also contact an attorney if possible.

If this turns out to be true, then they will take action on your behalf under various federal statutes, including the Fair Debt Collection Practices Act (FDCPA).

Can You Just Ignore Zombie Debt?

You can’t ignore zombie debt, as it will stay on your credit report for seven years, and it can wreck your chances of getting new credit cards and loans. Collection agencies are legally required to send written notices before they start calling you, but some do not comply with this rule.

If you get a call from someone claiming to be a debt collector, find out if they have sent you a letter first. In case, they haven’t sent one yet or if their letter doesn’t include all the information required by law (i.e., the exact amount owed), then hang up and call the Federal Trade Commission or contact them online at FTC Complaint Assistant.

If the person on the phone is really trying to collect a legitimate debt from you (as opposed to an impostor), ask them for proof that what they say is true before giving out any personal information over the phone and be aware if that debt is in the statute of limitations you should pay off zombie debt.

Final Thoughts

In general, there isn’t much you can do about zombie debts that have been sold and resold so many times that the original creditor no longer exists. Zombie collectors may not even realize that the debts aren’t valid in your state or jurisdiction.

However, it is important for consumers to know how to fight against zombie debt. A legal professional can help determine whether your rights have been violated through improper collection practices or harassment tactics used by these companies.