Zombie Debt Collector
By
Kenneth Long on May 18, 2010
Zombie debt collectors are not supernatural, but they can still give you a nightmare. These debt collectors specialize in buying the cheapest, most outdated debt on the market. They then use scare tactics to pressure you to repay the debt.
Often times they will threaten to sue you even though the debt has expired. They may state that they will renew the debt to keep it on your credit report. They may even threaten to contact friends, family or employers to embarrass you. All are illegal.
Indeed, what most consumers do not realize is that there are two key dates that dictate whether or not they need to worry about dealing with old debts. The first date that a debtor needs to understand is when the debt will expire.
Statute of Limitations
The statute of limitations prevents debt collectors from suing you over an old debt. All you would have to do is show up and prove that the statute of limitations has already expired to get the case for
judgment dismissed.
How long is the statute of limitations for old debts? It varies by state and by type of account (open vs. written contract), so it is best to obtain legal counsel to confirm whether or not you are protected by the statute of limitations for an old debt. The statute of limitations can range from 2 to 15 years.
Credit Reporting Limitations
Credit bureaus delete most types of debt that have been inactive longer than 7 years. This can be calculated as 7 years from the default date, or roughly 7 1/2 years from the
date of first delinquency. Therefore, the only way that these debts may remain longer is if one of three events occur:
- In some states, simply acknowledging that you owe a debt can restart the entire process. It is best to avoid stating that you owe it even if you are trying to resolve it.
- Making any type of payment on a debt will keep it on your credit report for an additional 7 years beyond that payment date. Payment plans may help prevent judgments, but they generally should be avoided on expired debts.
- If a creditor takes you to court and obtains a judgment prior to the statute of limitations expiring, the debt will remain on your credit report for an additional 10 years. It will also be listed as a public record.
How to Handle Zombie Debt Collectors
If you can afford to repay an old debt, then you should consider doing so. After all, the most ethical option is to repay debts that you promised to pay and are now able.
That being said, never cave in to illegal threats made by a zombie debt collector. They may threaten to keep you from buying your next home or getting that new job, but they cannot legally do so.
If you are being harassed by a zombie debt collector, protect your rights. If you know for a fact that the statute of limitations on the debt has expired, tell them to cease and desist all contact for this expired debt. Any violations of the
Fair Debt Collection Practices Act may be referred to the
FTC complaint assistant as well as punished through legal action of your own.