When dead debt comes back to life

With Halloween almost here, we’ve got a question for you — are your zombie-fighting skills up to snuff?

We’re not talking about fighting just any zombie — this time your undead enemy is zombie debt.

Zombie debt is debt you think is dead, gone, and forgotten, but has somehow come back to life. Debt collectors are calling, and your walking dead debt now threatens to wreak havoc on your finances.

Zombie debts might be:

  • debts you already settled with a company or other debt collector
  • debts that were discharged in bankruptcy
  • time-barred debts you may have forgotten or overlooked that are past the statute of limitations
  • debts that no longer show up on your credit report, generally after seven years
  • debts you never owed, like debts resulting from identity theft

Here are some tips for battling zombie debt when a collector resurrects it:

  • Know your rights to protect yourself. Federal law gives you certain rights in dealing with debt collectors. For example, if someone contacts you about a debt you thought was dead, you can ask the collector to send you a written validation notice detailing the amount owed, and the creditor’s name. By law, the debt collector has to send you this notice within five days of contacting you.
  • Don’t ignore lawsuits. If a debt collector files a lawsuit against you to collect a zombie debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.
  • Don’t accidentally reset the debt clock. If you make, or promise to make, a debt payment on a time-barred debt — a debt too old for a collector to make you pay — the statute of limitations clock may reset, and a debt collector can then sue you for the full debt amount, plus interest and fees.

If a debt collector threatens, harasses or intimidates you into paying a zombie debt — that’s illegal. Report it to the FTC and your state Attorney General’s office.

Blog Topics: 
Money & Credit

Comments

OHOHOH, THANK YOU AMY. THIS IS A LONG NO OF YRS. I AM SADDLED WITH THIS. EVEN WHEN I RESPOND THEY ARE NOT DEBITED BY ME. THEY COME UP WITH ALL THESE LATE FEES AND KEEP REPORTING TO CREDIT UNION AS IF IT WAS 3 MOS AGO AND THEY HAVE PLAGUED ME WAY PAST THE 7 YRS. ESPECIALLY THESE CREDIT CARDS THAT PEOPLE GET OVER THE MAIL. ENTERPRISE RENTAL CHARGED MONEY ON MY ACCT BACK IN 2001OR2, WHEN I ASKED THEM NOT TO, I ALWAYS PAID IN CASH AFTER THE FIRST COUPLE CHARGES, YET WITHOUT MY PERMISSION, IT WAS DONE, CAUSED MY ACCT OVERDRAWN, AND TODAYS 14 YRS. LATER OR SO, I CAN NOT GO TO CERTAIN RENTALS AND GET A CAR. THEY ARE HOLDING ME HOSTAGE AND LIKE A CRIMINAL. IT HAS HURT ME OVER AND OVER. ONE MORE THING. NEVER BUY ORDERS AND THEY SAY IF YOU DO NOT CONTACT THEM IN A CERTAIN AMT. OF TIME THEY WILL KEEP CHARGING. NONONO DON'T DO IT. EVEN WHEN YOU TRY TO REACH THEM IN TIME OR U DO REACH THEM AND REQUEST THE CHARGES CLEARED, THEY USUALLY WILL NOT CLEAR YOU. OR PAY YOUR OVERDRAFT, ETC. THIS IS ONE OF THE WORST CRIMES ON A PERSON. IT SHOULD BE A LAW THAT IF A PERSON DO NOT CONTACT YOU FOR ANOTHER ORDER, YOU CAN NOT CHARGE THEIR ACCT. PEOPLE FORGET, PEOPLE THAT ARE LOSING MEMORY, AND THEFTS TO CHARGE ITEMS... THANK YOU FOR THE INFO. THIS IS ONE OF THE MOST VALUABLE EMAILS I HAVE EVER NEEDED. BLESSINGS AMY. BARB

I had my identity stolen in the early 1990's...I continue to have debt collectors call me and instead of going through the hassle of explaining to them about my identity being stolen, I ask them when it was incurred and when I hear that it was around the time my id was stolen I tell them that the statute of limitations is up and they would waste their time and money trying to sue me. My debt has outlived the thief that stole my identity. It will never go away. I will be dealing with this for the rest of my life. It happened in my 20s and I am now in my 40s. It took me forever to get my credit fixed. Protect yourselves!

This is good information. We use a letter to send that gets debt collectors to stop calling. All debts are past the statute of limitations. Never talk to anyone on the phone. You can Google these letters but it would help the readers if you gave some example letters here.

This blog has links to the information you're seeking.

This sentence of the blog links to sample letters:

  • If your zombie debt is a result of identity theft, you’ll find tips and sample letters to help you dispute it at identitytheft.gov

This sentence links to information about your rights to protect yourself from debt collectors, and write a letter to stop a debt collector from contacting you:

What to do if a business goes bankrupt or closes and you get an old debt that you know you paid?

If you have old debts, collectors may not be able to sue you to collect on them. That's because debt collectors have a limited number of years — known as the statute of limitations — to sue you to collect. After that, your unpaid debts are considered "time-barred." According to the law, a debt collector cannot sue you for not paying a debt that's time-barred. This FTC article explains time-barred debts.

Very helpful information!

Thought this article interesting.

FTC help me in exactly same situation. If you need help, let them know.

I continually receive emails from DOJ (Dept of Justice) or other debt agencies that state a warrant has been issued for my arrest. I also just received phone call that I have until 11:00 Friday 10/30/2015 to contact Steven Mason at DOJ to have warrant lifted. Phone number listed from caller ID 239-444-8689 and another number 773-546-9448. Please check these numbers and people they are causing problems.

Please report these numbers to the FTC at ftc.gov/complaint. The information give goes into a database that law enforcement uses for investigations.

Blog comments don't go in the database.

Hi, what about a debt collector thats not on my credit report, garnishing my paycheck? Do I have any rights here, or what can I do?

If you don't know why the debt collector is garnishing your paycheck, contact the collector. Your payroll office might have a name or number for the collector.

In general, a collector has to prove it has a right to take your money before it can garnish your paycheck. Ask the collector to show you proof that it has the right to garnish. If the collector doesn't have proof, or the debt isn't yours, or if you have other problems, you can contact your state and local consumer protection agencies to complain.

If you need a lawyer, this state-by-state list from the American Bar Association will help you find someone. You can also visit this site from the State Bar Associations.

 

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