What Is Zombie Debt?
- Zombie debts are old debts that seemingly reappear (or “rise from the dead”) when debt collectors contact you to collect them.
- Debt collection companies sometimes buy old debts in bulk. Unethical debt collectors use scare tactics to get you to pay an old debt, even when it’s no longer enforceable.
- Verify a debt belongs to you and is within the statute of limitations before doing anything else.
What is zombie debt?
Zombie debt is old debt you haven’t heard about in a long time (or ever) that appears out of nowhere when a debt collector contacts you. This typically happens when a debt collection agency tries to collect debts they’ve just bought in bulk from a creditor or another agency.
The collector could be contacting you about a debt that you thought was resolved or forgotten, or debt that belongs to someone else.
Do I have to pay zombie debt?
You may need to pay zombie debt if it’s yours and still within the statute of limitations on debt — a period of time when a creditor or debt collector can sue you if you don’t pay. The statute of limitations varies by state and type of debt, but it’s typically between three and six years.
Once that time has passed, it becomes time-barred debt, and debt collectors can’t sue you, garnish your wages or take your collateral.
In fact, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion in 2023 stating that threatening to sue for a time-barred debt is illegal under the Fair Debt Collection Practices Act.
You should consult a lawyer if you’re not sure whether to pay a debt, but here are a few rules of thumb to consider:
Pay zombie debt if . . .
- It’s yours, and
- The statute of limitations hasn’t expired, and
- The debt collector shows you proof of the debt, typically in a debt validation letter
Don’t pay zombie debt if . . .
- It doesn’t belong to you, or
- The debt collector can’t verify basic information about the debt
How should I handle zombie debt collectors?
First call
- Stay calm and cautious. Unethical debt collectors may threaten legal action and credit damage to intimidate you. It may feel impossible, but the best way to protect yourself is to remain calm. Don’t give the debt collector any information until you’re sure the debt is legitimate.
- Don’t pay. You don’t need to make a payment right away. In fact, you have 30 days to dispute the debt once you’re notified. Plus, making a payment on a time-barred (expired) debt could restart the statute of limitations, which means the debt would be collectible again.
- Ask for debt validation. Legally, the debt collector has to provide you with information — the original creditor, how much you owe and how to dispute the debt, for example — in their first contact or within five days. Ask them to send this information in a debt validation letter.
- Confirm if the debt is legitimate and enforceable. Read the debt validation letter to see if it’s a debt you owe. If the collector can’t provide you with information about the debt, it’s likely a scam.
- Pay or dispute the debt. If the debt is yours but the statute of limitations has expired, you can ignore it or negotiate a settlement or payment plan. If it’s yours and still within the statute of limitations, you may need to pay to avoid a lawsuit.
If the debt isn’t yours, or if you’ve already paid or settled it, you can dispute the debt in writing within 30 days. Use the CFPB’s sample letters to debt collectors as a starting point for your letter.
Lawsuits
If you’re sued by debt collectors, try to get legal help and respond to any complaints and summons.
If you don’t respond or appear in court, the judge can issue a default judgment. Your wages could be garnished, your bank account could be frozen or a lien could be put on your house.
How can I stop zombie debt collectors?
If you’re feeling overwhelmed by calls from a debt collector, you can stop debt collectors from calling by sending a cease-and-desist letter. This will only prevent them from contacting you — it doesn’t mean they can’t sue you.
But if zombie debt collectors are harassing you, threatening you or treating you unfairly, they could be violating your rights under the Fair Debt Collection Practices Act. You can report them on the CFPB website or to your state’s attorney general office.
Frequently asked questions
The debt collector should provide you with an itemized list of how much you owe in interest, fees, credits and payments as of a certain date. If they don’t give you a specific date, you can ask for it.
If the debt is old, the debt collector will likely be open to settling for much less than you owe. Ask about hardship programs, create a reasonable repayment plan and work collaboratively with the debt collector.
Once you come to a near-consensus, ask if they have any wiggle room on their end to lower it. If you’re experiencing financial hardship, explain it to them — they may be willing to help.
If the zombie debt is yours and within the statute of limitations, it can be smart to pay it off to avoid a lawsuit and damage to your credit.
In general, zombie debt only impacts your credit if the debt is less than seven years old (10 if it was part of Chapter 7 bankruptcy). After that, negative marks fall off of your credit report.
Zombie debt can reappear on your credit report if debt collectors report the debt as new debt to the credit bureaus. But if the statute of limitations has run out, you can dispute it as illegally re-aged debt to get it taken off your credit report.
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