How Zombie Debt Can Come Back to Haunt You

There’s a spooky kind of debt out there. It’s called zombie debt. It’s a debt that isn’t yours or has expired, but a collector has come to get it from you.

You should be on the lookout for zombie debt and know how to handle the often ruthless — and sometimes scamming — zombie debt collectors. You aren’t legally obligated to pay a debt that is too old or isn’t yours. In fact, making a payment can resurrect the entire debt — which can be expensive, and detrimental to your credit report.

What is Zombie Debt? 

Zombie debt is a debt that’s typically older than six years, is no longer on your credit report or belongs to someone else. Zombie debt often includes old bills, settled debts, expired debts and debt that was discharged during bankruptcy. Sometimes zombie debt is also due to a processing error (i.e. the person has a similar name), identity theft or fraud. Someone could be trying to get you to pay something that never existed or was never yours.

Most companies give up on debt after six years of no payments. But they often sell the debt to a third party at a discount. That third party might revive the debt and hound you for it or resell the debt to another agency. As an old debt passes through many hands, the data becomes more and more unreliable.

That’s what makes zombie debt so scary. You don’t know exactly where it’s coming from and if it’s a legitimate debt you owe. Before proceeding, make sure to understand if the debt is something you legally owe or not. If the statute of limitations has passed — meaning how long a lender can collect a debt — then you’re not legally obligated to pay it. meaning how long a lender can collect a debt — then you’re not legally obligated to pay it. This time period varies by state, so make sure you know the statute of limitations for your state. After that time period has passed, paying for any part of it causes more harm than good, because it restarts the statute of limitations and enables the collector to sue you for payment.

What Do You Need to Look Out For?

Zombie debt collectors are very savvy. They’ve honed their skills of tricking people into paying debts they don’t actually owe. That’s why it’s vital that you know how to recognize a zombie debt collector and the tactics they might use on you.

Here are some signs to watch for:

Debt that isn’t yours: If a debt doesn’t sound familiar or you don’t have written documentation, don’t make a payment. You’re not responsible for debts that aren’t yours or have expired. If you pay even a small amount on these debts, you can be held responsible for the rest of it.

Verbal harassment: Debt collectors may call you many times demanding payment. They might curse at you and say derogatory statements. They also might call you at inappropriate times, including at your place of work. While it can be stressful, remember that they are skilled at harassment and that you have certain rights. For example, under the federal Fair Debt Collection Practices Act, debt collectors can’t call you before 8 a.m. or after 9 p.m.

Threatening a lawsuit: If the statute of limitations has passed, it’s illegal for the collector to sue you for the debt. So don’t be scared into making a payment if they threaten you. If they send you a summons letter detailing the debt, don’t ignore it. If you don’t respond within 30 days, you could forfeit your ability to fight the lawsuit using the expired timeframe as your defense.

Lying about who they are: A debt collector might try to tell you that they’re a lawyer or part of a litigation firm when they’re not. Lawyers don’t work to collect debts.

Promising not to contact you again if you make a small payment: Paying even a few dollars on a debt that you’re not obligated to pay causes that debt to rise from the grave. It resets the statute of limitations and the collector can sue you for the entire amount.

Begging for information: The debt collector might ask you questions about your credit history, your whereabouts, and your income. Giving them information could make it easier for them to collect the debt or get you to say that the debt is yours when it isn’t.

Promising that the debt won’t go on your credit report: If you make a payment on a debt you don’t owe, it’s recorded on your credit report for up to seven years. Don’t trust a debt collector that tells you that it won’t show up on your credit report.

How You Can Vanquish Zombie Debt

Know what to do when zombie debt collections come looking for you. You can put a stop to their harassments and ensure you don’t get trapped into a scam to pay a debt that you do not owe.

Learn your rights: The Fair Debt Collections Practices Act regulates how debt collectors can communicate with you and how you can protect yourself from scams and abuse. For example, if you state in writing in a cease and desist letter that you don’t want the debt collector to contact you further, they’re legally obligated to respect that request.

Get everything in writing: Don’t be pressured into giving information to a debt collector over the phone. Don’t agree to or acknowledge anything until you know all the facts. It could give the debt collector leverage. Instead, request that any communication is sent to you via mail. Specifically, ask for a debt validation letter that outlines the amount of debt and to whom the debt is owed.

Respond within the time frame: Even if you don’t owe the debt, you need to respond stating so. You only have 30 days to respond to a letter from a debt collector. Heed this timeline carefully — not doing so means you could give up certain rights. You’ll need to respond in writing to dispute the debt or to request the name and address of the original creditor. If you don’t dispute the validity of the debt, you may lose your rights to claiming that the debt’s statute of limitations timeframe has passed.

Seek legal help: If at any point in the process you’re unsure of how to proceed, get legal guidance. An attorney can make sure you protect yourself from zombie debt collections. You can find a lawyer through the Consumer Financial Protection Bureau to represent you.

Check your credit report: Wondering how to remove zombie debt from your credit report? Get a free credit report and review it carefully. If there’s an erroneous or expired debt on your credit report, file a dispute with the credit bureau and the creditor.

Freeze your credit: If you’ve been a victim of identity theft or want to safeguard yourself from it, consider freezing your credit. This prevents someone from applying for credit in your name. It also prevents lenders from running your credit report, so be sure to unfreeze your credit when applying for a credit card or a loan.

While zombie debt can be scary, you can ward it off with the proper steps and knowing your rights. Instead of paying a debt you don’t owe, you can focus on other ways to boost your credit score and personal finances.