Understanding Zombie Debt

Zombie debt, also known as a phantom or junk debt, refers to a very old debt that collection agencies have purchased at a very low price in the hope of making money by forcing the borrower to settle the amount. The name is taken from the fact that this type of debt is supposedly long dead because its statute of limitation has already expired or it came as a result of identity theft or mistaken identity. Debts that have been settled in bankruptcy proceedings can also qualify as zombie debts.

If you have been called or otherwise contacted by a representative of a collection company about this type of debt, you should neither panic nor give in immediately. There are things that you can do to deal with zombie or junk debts. Here are some tips.

Don’t Acknowledge the Zombie Debt

Since such debts are already very old, you probably do not know how you got the debt in the first place. If this is the case, you should tell the collection agency that you are not acknowledging it because you do not know about it. Before you agree to pay the debt or even indicate that you might just have forgotten about it, you should ask the collector to show you proof that you are the one responsible for the debt. Still, if you know that the debt is really yours, you need to settle it.

Know Your Rights


The best way to deal with junk debt collection agents is to know your rights. You should know that a collector cannot harass you, threaten to sue you or even call you in the wee hours of the morning just to ask you to pay up. If you filed for bankruptcy protection, just show the discharge order to stop the collection company from forcing you to pay.

Seek Debt Validation


Based on the FDCPA (Fair Debt Collection Practices Act), anyone has the right to check the debts being collected by debt collectors. You have at least a month after the debt collector first contacted you to request debt validation from the collecting agency. You should ask for documents showing how much you owed, information from your original creditor on how you secured the debt and the proof that the new collecting agency is indeed allowed to collect payment from you. Send your request through certified mail so that you have proof that you indeed sent a request to the collection agency.

Determine Statute of Limitations of the Zombie Debt

The statute of limitations on a debt is different from one state to another. You have to know the statute of limitations in your state. For all you know, the debt being collected from you is already long expired.

Check Your Credit Report

In order to force you to repay your zombie debt, a collection agency might report the debt to the credit bureaus, which can adversely affect your credit history or rating. In order to prevent this from happening, you should regularly check your credit report and dispute any errors you see with the credit agency or bureau.

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