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Zombie Debt: What Is It And How To Prevent It



Zombie Debt


Zombie debts, also called phantom debts, are old or expired debts that scheming investors or scammers purchase at a massive discount. They then try to get misinformed debtors to pay back money that they likely aren’t legally responsible for anymore. Zombie debt can be a real problem, especially for people who don’t know any better. So be careful out there, and don’t let yourself become a victim of these unscrupulous characters.

Learning about zombie debt can help you deal with scammers effectively. Most old debts will disappear from your credit report after seven years. So, if a debt collector contacts you, it’s important to do your research and make sure they are legitimate. Even though you may be responsible for a debt, you may not need to pay the full amount. By understanding what you are legally responsible for and what you aren’t, you can easily identify debt collection scams.

Zombie Debt: How It Works

Even though debt collectors may not be able to take you to court to collect on zombie debts, they may still try to contact you to ask for payment. Because the cost of purchasing expired debt is often low – sometimes only a few pennies per dollar – zombie debt collectors can still turn a profit even when consumers agree to repay old debts. Unless the state you live in requires a debt collector to disclose that they can’t sue you for the debt, you might accidentally revive the debt through your actions.

Although you may think that paying off an old debt, or even just acknowledging it, will help your credit score, this is not always the case. Doing either of these things can reset the clock on the debt, which means the collector can sue you or report the debt to the credit bureaus.

Zombie Debt Collectors’ Tactics

Editorial Credit: Pressmaster

Dealing with debt collectors can be a nightmare. They’re often aggressive and try to trick you into paying a debt you may not even owe. Here are some common tactics they use:

  • Ask you to pay a small amount in exchange for leaving you alone. It’s important to know that you don’t always have to pay zombie debt. Sometimes debt scavengers will try to get you to pay them a small portion of the debt, but you can ask them to stop without paying anything under the Fair Debt Collections Practices Act (FDCPA). All you have to do is send them a written letter telling them that you don’t want to be contacted anymore and they must comply.
  • Threaten to sue you if you don’t pay. There’s nothing scarier than a debt collector coming after you for an old debt. But you can rest easy knowing that they can’t legally sue you for a time-barred debt.
  • Verbally abuse or harass you. Harassment from debt collectors is illegal under the FDCPA. This includes threats, harsh words, and excessive calls. While it can be scary, you can stop the harassment by writing a letter to the debt collector telling them to cease all communication.
  • Lie and tell you they are a “litigation firm.” There are many debt scavengers out there who will try to trick you into believing that they are lawyers. Don’t be fooled! These individuals often have no legal grounds to sue you or pursue payment for zombie debts.

Debt collectors have been known to use underhanded tactics to collect on debts, even from people who don’t actually owe the money. It’s important to know your rights when it comes to debt collections and to understand when you are actually responsible for a debt.

Collection Attempts By Zombie-Debt Collectors

There are many different types of debt that debt collectors may attempt to collect. However, some debts are more common than others. Here are some of the most common types of debts:

Resolved Or Discharged Debts

Chapter 7 bankruptcy can offer relief from some of your debts. This means that you are no longer legally responsible for repaying these debts. With a settled debt, you and your creditor should have a written agreement stating that the debt has been resolved and that you are no longer liable for it.

Debts That Have Expired

Even though federal student loans don’t have a statute of limitations, other types of debt do. This means that after a certain amount of time has passed, a debt collector can’t sue you for the debt. The statute of limitations on debt varies depending on what state you live in and what type of debt it is, but it typically ranges from three to ten years.

Your Credit Reports Are No Longer Showing Debts That You Owe

Negative items on your credit report, like collections or late payments, can be reported by collectors to the credit bureaus for up to seven years. However, paying off a zombie debt or agreeing to do so can restart the seven-year clock.

Debt That Isn’t Yours

Identity theft is one of the most common and costly crimes in the United States. According to the Federal Trade Commission (FTC), more than nine million Americans have their identities stolen each year.

An identity thief could open new accounts, get credit cards, and make charges in your name.

Protecting Yourself From Zombie Debt

When it comes to zombie debt, the best defense is a good offense. Doing your research and knowing the law inside and out is the best way to keep debt scavengers at bay. By being clear on what is allowed and what isn’t, you can easily spot when someone is trying to scam you.

1. Research the debt

It’s possible that you’re being charged with a debt that isn’t yours. This can happen for a variety of reasons, so it’s important to make sure that the debt is yours before paying it off. One way to do this is to check for any records you may have of the debt.

2. Request a debt validation letter

The best way to determine whether a debt is yours is to request a validation notice from the creditor. This notice will include the amount of the debt, the original creditor, and when the debt was incurred. Compare this information to your records to confirm whether the debt is yours. If the debt is not yours, send a dispute letter to the creditor.

3. Determine your next action

The best way to handle a debt collector is to simply pay the debt. However, you may want to send a dispute letter to the creditor validating the debt, especially if it has already been paid. The debt collector will need to provide proof that the debt is yours, but they will likely leave you alone once they realize they don’t have any proof.

Additionally, disputing the debt directly with the three major credit bureaus – TransUnion, Experian, and Equifax – can help remove it from your credit report.

For invalid debts or those not belonging to you, take similar steps by requesting verification of the debt from the collector and sending a cease and desist letter asking them to stop contacting you.

When it comes to your credit, it’s important to stay on top of things and know where your reports stand. Luckily, there are a few ways to get a free credit report. One way is through This website allows users to view one free report from each of the three major credit bureaus per year.

Another way to get a free credit report is by contacting the credit bureau directly. Experian, Equifax, and TransUnion all offer free reports under certain circumstances, such as when job hunting or opening a new line of credit.

Once every 12 months, federal law entitles consumers to a free credit report from each of the three nationwide consumer reporting agencies: Equifax, Experian, and Transunion.

Go to to request your free annual credit reports.

4. Tell the debt collector to stop contacting you

You have the right to tell a zombie debt collector to stop contacting you. The best way to do this is to send the collector a certified letter with a return receipt, so you can confirm that it was received. The Consumer Financial Protection Bureau (CFPB) has sample letters on its website that you can use as a guide.

Zombie-debt collectors who violate the Fair Debt Collection Practices Act (FDCPA) by harassing or threatening to sue you can be reported to the CFPB or your state’s attorney general office, or sued in state or federal court.

5. Don’t share any information or admit to the debt

Don’t let zombie debt haunt you – take action to protect yourself. Ignoring the debt or making payments towards it can have legal consequences in some states, so it’s important to be aware of your rights and options.

The Best Way To Avoid Zombie Debt

Debt can easily become overwhelming, but there are ways you can proactively prevent it from becoming a burden. One way is by making timely payments and keeping track of your payment history. This will ensure that your debt does not become “zombie debt” – debt that lingers and accumulates interest. Another way of preventing debt from taking over your life is by consolidating your debts into one monthly payment using a debt consolidation loan.

Final Thoughts

Debt collectors often contact people about debts that have already expired, been paid off, or don’t even belong to them. You are not legally required to repay any of these debts. To figure out whether a debt is yours, you can ask the collector for the age of the debt or do your research. And, if you find that an error has been made, you can dispute the debt with the credit bureaus or creditor.

There are a few things you can do to deal with zombie debt, depending on whether or not it belongs to you. First, check your credit report to see where the debt is listed.

Kareem was born in Tunisia, and he has always had a passion for politics. He is an economist, and he has run for office three times. He is currently in his third marriage, and he has four children. His passion is waterskiing; he loves to ski on the open water.

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