Protecting Yourself From Zombie Debt Collectors
The term “zombie debt” refers to any old debt that has suddenly “come back to life” to haunt you. Essentially, these are debts that everyone agrees are too old to collect. If you didn’t pay a bill last decade, and no one took you to court over it, then the debt is too old to pursue. If a collection agency contacts you to collect on that old debt, the debt becomes a zombie.
Zombie debts do not require repayment in most cases. In fact, repaying them could lead to expensive legal trouble. Protect yourself by learning more about zombie debt and the strategies that debt scavengers use to frighten people into paying expired debts.
Types of Zombie Debt Collectors Often Pursue
Zombie debt collectors are often trying to collect on accounts that are legally out of bounds. This may include:
- Any debt that has exceeded your state’s statute of limitations
- Debts that do not belong to you
- Any debts that were discharged during bankruptcy
Debt scavengers rarely have the legal right to pursue repayment on these accounts. The companies only make money by targeting people who do not understand consumer protection laws. At times, they will use illegal strategies to trick you into payment. At other times, they will use legal strategies to collect money that you do not have to repay.
This is a tricky, malicious industry that will try practically anything to get more of your money. Assuming that your debt falls into one of the categories listed above, you do not owe the zombie debt collectors anything.
Unfortunately, debt scavenging has risen dramatically in recent years. Debt collection companies are buying these delinquent debts in bulk and the older the debt the less collectible it is and the cheaper it is to buy. So, even if it is a small amount of debt, these collectors are still making money.
Illegal Tactics Used by Zombie Debt Collectors
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Not many people in the zombie debt collection industry follow a strict ethical code. They will do just about anything to get money from you. Learn about some of the most common illegal strategies used so you do not fall for the ploys when a professional tries them on you.
Harassing You to Pay
Contacting you by phone and letter is perfectly legal. Otherwise, companies wouldn’t have the ability to pursue repayment. The Fair Debt Collection Practices Act, however, limits what collectors can do and say. Harassing language is illegal. If a debt collector uses profanities or threats, then that person has broken the law.
You can usually combat this by telling the collections agency that you know your rights. If that doesn’t work, you may need to record future conversations so you will have proof of the harassment.
In the meantime, contact the Association of Credit and Collection Professionals, your state’s attorney general, and the Consumer Financial Protection Bureau to file complaints about the abusive behavior.
Taking the Case to Court
No one wants to go to court. It’s expensive and time-consuming. Zombie debt collectors, however, will likely threaten you with a lawsuit to get their money. Luckily, there are credit card statutes of limitations that can protect you from most lawsuits. If your credit card debt is more than seven years old, then the company probably cannot sue you for repayment.
The statute of limitations differs from state to state, so you need to know the laws in your area before you can confront collectors. If the statute of limitations has expired, tell them that they cannot sue you for repayment. Do not admit that the debt is yours. Simply tell them that the statute of limitations in your state protects anyone from lawsuits after a certain number of years.
If the company keeps threatening to sue, you should contact a lawyer for advice. The guidance of an experienced attorney will ensure that you don’t miss important steps that need to be taken to stop the harassment.
If you hire a debt harassment attorney, he or she will do the following on your behalf:
- Send a letter to the debtor demanding that they cease communication with you
- Request validity and calculations of the debt
- Send a letter to contest the debt
Submitting the Debt to a Credit Bureau
Zombie debt collectors might also threaten to report your debt to a credit bureau. Some might even follow through to place negative information on your credit history. This is known as re-aging the debt.
Most types of debt can only remain on your credit history for up to seven years. Zombie debt, by definition, does not belong in your credit history. It’s old, outdated information that has lost its usefulness.
Zombie debt collectors will still do this to make your life difficult. Tell them that it is illegal. If they contact credit bureaus anyway, dispute the debt by contacting the collector. If that doesn’t work, you will need to dispute entries with the three major credit bureaus.
There are a few items, however, that can legally remain on your credit report for longer than 10 years. If you have defaulted on a federally guaranteed student loan or have unpaid tax liens.
Legal Strategies Used by Zombie Debt Collectors
Zombie debt collectors usually try to stay within the law so they can get repayment without going to court. Many of these legal strategies, however, still look unethical to most consumers. You need to know that unfair isn’t always the same thing as illegal. Even if debt collectors use legal strategies, you may need to take an aggressive stance against them.
Requesting Partial Payment
Debt scavengers may tell you that they will eliminate your debt if you make a partial payment. This may sound like music to your ears if you’re tired of getting letters and phone calls about the old debt. When a scavenger offers to settle the debt for pennies on the dollar, many people jump at the chance.
This is a big mistake. Do not fall for the trick. Once you make a payment, they will double their efforts to get the rest of the money. Even worse, making a small payment could reopen the debt. You think you’re paying off a mild annoyance, but you’re actually restarting the clock on your credit card statute of limitations. That means the collector can now sue you in court.
How to Deal With Zombie Debt Collectors
Knowing your rights is the most important part of dealing with zombie debt collectors. Ignoring the scavengers is usually the best thing you can do. Do not talk to them on the phone. Hang up as soon as you realize it is a collection agency. If the company sends you a letter in the mail, read it to see what they have to say, but do not respond unless you have good legal reason to do so.
All debt collectors are required to give you validation upon request. If you want validation, send a certified letter to the collector.
If the debt scavengers file a lawsuit, respond to it. Do not ignore it. If the statute of limitations has passed, the judge will likely throw the case out. If you do not appear in court, though, you could be held in contempt. You should always be the party who follows the law. Let the collectors make mistakes that will backfire on them.
Here is what you should do if you are contacted by a zombie debt collector.
- If you get a call, stay on the phone for as little time as possible. Ask for their address and send them a certified letter as stated below.
- Never state that the debt is yours. There is a chance it might not be and if you give them any hint that it could be your debt, they can use it as evidence against you.
- If you receive any correspondence, keep it.
- If you get contacted, send a certified letter within 35 days to the debt collectors. In the letter, dispute that you owe the debt and ask them to provide proof that you owe it.
- Until you receive written proof that the debt is yours, don’t talk or contact the debt collector for any reason. Also be sure to get the name and address of the original creditor if the debt was resold. The Fair Debt Collection Practices Act (FDCPA) requires the release of this information so don’t let them tell you different.
Getting your credit back on track
One of the most important numbers associated with your name is your credit score. Your credit score is what both creditors and lenders utilize when deciding your creditworthiness. Having bad credit is something that can affect multiple aspects of your life from interest rates on credit cards to your ability to rent or get a mortgage. Regardless of the reasons behind your poor credit, the important part is starting the process of getting your credit back on track.
The first step in this process is to access your credit report. You are entitled to one for free every year. Take the time to carefully review your report for any inaccuracies and make a note of them. Finding errors on your credit report is not uncommon. If you have any, this could be significantly lowering your credit score. For this reason, it is important to keep an eye out for inaccurate entries, outdated information or multiple entries for the same debt.
Here are some of the errors that can be addressed:
- Accounts that are not yours.
- Bankruptcy or any other legal actions that are not yours.
- Your name is misspelled. As a result, negative entries that belong to someone with a similar name can be added to your report or positive entries may not be showing up when they should be.
- Inaccurate dates.
- Any debts that has aged off.
- Debts that cannot be verified and validated.
If you do encounter inaccurate information on your report, you should consider hiring a reputable credit repair company to help you get your credit report back in good standing. There are many reasons to hire a credit repair agency so depending on your situation, this can be the best route to take.