Zombie Debt: Run, Hide or Stand Your Ground?

Have you received a call or letter demanding you pay an old debt that either you forgot about, paid off, or is simply not yours? AHH! You may be a victim of “zombie debt collection”.

Zombie debts typically show up for various reasons:

1.      Sometimes they are debts that are either very old and/or no longer owed - past the statute of limitations (SOL) for legal action in your state, which is usually between three and six years. 

2.     You may have forgotten about the debt or had previously settled on the debt with either the original creditor or another collection agency.

3.     The debt is a result of identity theft.

4.     You filed the debt with a bankruptcy filing and it was discharged.

The biggest issue with these zombie debts is that individuals are pressured into paying the debt, which they may not even need to pay! The first step is not to acknowledge the debt, but request verification that the debt is in fact yours, and that you may be required to pay. Let the collector know that you would like to “validate” the debt prior to discussing it any further; obtain their name and address…then hang up the phone and end the conversation.

o       Send a debt validation letter, certified return receipt requested (this way you know they received it). The collection agency will have to give you proof of the debt, such as the original creditor with account number, the original balance when it was sent to collections, any interest or fees that have been charged, along with any payments applied to the debt since being sent to collections. They must also provide you information on how you can continue to dispute the debt, if necessary.

BEWARE! Be advised that if you acknowledge that you owe a debt, or agree to make a payment for any amount, then it could reset the statute of limitation and you could be legally responsible for this bill, even if it’s not yours. 

Keep your zombie debts in their grave this year!