Zombie Debt Reminder

I saw this post about a guy arguing  with a zombie debt collector on Consumerist, and I think it’s time to remind you what Zombie debt is.  It doesn’t mean the collector is a zombie (although you might feel that way!) It means that the debt is expired or charged off and has risen again from the dead. Unscrupulous debt collectors will try to get you to pay, even though you don’t owe.

When Does Debt Expire?
It varies by state, but most states expire debts after six years. Some debts can last for fifteen years. After that, you are no longer legally responsible for the debt. Some people would argue that you’re morally responsible, but legal and moral are two different things! Personally, I wouldn’t pay it because the money doesn’t go to the company you originally owed. It goes only to the collector, and helps them stay in business so they can harass other people.

What Happens After Debt Expires?
The statute of limitations means that collectors and creditors can no longer sue you to repay the debt once it has expired. They can threaten to, but they can’t actually do it. If they did, the court would see that the statute of limitations has been exceeded and rule in your favor.

Can They Report It to the Credit Bureaus?
Typically, no. Defaulted debt can only stay on your credit report for seven years from the date of default. By the time a zombie debt collector gets ahold of it, the debt is usually older than that. A crafty collector may “update” it in order to add it to your report. If that happens, dispute the debt with the credit bureau. They will ask the collector to validate the debt, which the collected typically can’t do, and it will be removed.

How Should You Respond to a Zombie Debt Collector?
As amusing as the call I’m linking to is, don’t engage the collector by phone. Send a letter demanding verification of the debt. Don’t acknowledge the debt in your letter. Tell them to cease contact with you, as well. Legally, they must comply. Typically, they won’t comply. If they continue to contact you, report them to the FTC and your state Attorney General for violating the Fair Debt Collection Practices Act. CC the collector on those letters. You can also sue them in small claims court for violation of the act.

What Is a Debt Validation
The woman on the linked call asserts that the validation is the fact that he paid on the debt for two years and then stopped. That’s not validation! Validation should be an account statement, at a minimum. It should also include something indicating that the creditor has assigned or sold the debt to the collector. It should also detail the original debt vs. additional fees and interest added by the collection agency.

If a collection agency tries to collect an expired debt from you, don’t engage them any further beyond your demand for validation and your cease and desist letter. If they escalate the situation by calling you at work, you may need to hire a lawyer to get them to go away.

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