What Is Zombie Debt?
Zombie debt is debt that has disappeared from your credit record but is still being pursued by someone for various reasons. Zombie debt has most likely been written off as uncollectible and long forgotten. Even when a debt is too old to be legally pursued, zombie debt might come back to life if a debt collector tries to collect on it once more.
How Credit Goes Zombie
Debt over three years old has either been paid off, forgotten about, or belongs to someone else, typically called zombie debt. In addition, it may result from computer mistakes, identity theft, or a false effort to collect on a debt that never existed.
Most likely, the original creditor transferred the loan to a debt collection firm after giving up on it. These debt collectors often conduct intimidating and harassing phone calls and maybe dishonest.
The Limitation Period
In most jurisdictions, the statute of limitations for a lender’s ability to pursue collection of a debt is three to six years; in others, it is much less. Even after the statute of limitations has elapsed, the obligation is still deemed lawful, but you are not legally obligated to pay it. However, the businesses that purchase uncollectible loans are only manipulating statistics. They only require a small number of individuals to pay back their loans to make a profit.
People who are the target of these initiatives must exercise caution. Paying off a bill that has passed its statute of limitations will not help you since it will relaunch the statute of limitations, re-enter the debt on your credit report, and give the debt collector the right to sue you in court.
How to Respond If Someone Contacts You Regarding Zombie Debt
Under the Fair Debt Collection Practices Act, debtors may defend themselves against harassment (FDCPA). This specific regulation controls the conduct and activities of third-party debt collectors and their methods. It means how they may communicate with debtors, including the hours and frequency of such communications.
The most crucial thing is to avoid talking to the debt collector on the phone. Within 35 days of communication, get their address and send them a certified letter. Ask them to provide proof of your debt to refute your need to pay.
Write the debt collection agency another letter if they keep getting in touch with you, telling them that they can only get in touch with you by letter or that they will file a lawsuit. If the debt exceeds the statute of limitations, the collector will most likely disappear.
Conclusion
- Debt that has passed the statute of limitations and cannot be collected is zombie debt.
- Debt collection companies could try to collect on it despite this—basically, bringing it back to life.
- Zombie debt is not legally enforceable, yet collectors of debt may be forceful and dishonest in their pursuit of payment.
