Zombie Debts: What To Know
Zombie debts are those that debt collectors have no right to sue you for but can still try to get you to pay. Below are a few things to know about zombie debts.
Forms of Zombie Debts
Zombie debts come in different ways. Below are a few examples.
Old Debts
State law determines how long a creditor has to instigate debt collection processes, like lawsuits. In Washington, a creditor has a maximum of six years (after the last payment or default) to file debt-collection lawsuits. However, some creditors might continue to harass you and threaten you with lawsuits even after the statute of limitations expires.
Settled Debts
Settled debts are those that you have paid off. Say you borrow $10,000 with the agreement that your total repayment will be $11,000 (the extra $1,000 being interest and other charges). Your debt is over once you clear the $11,000. Any amount the creditor might demand above that is zombie debt.
Discharged Debts
The government uses bankruptcy law to give individuals and businesses a fresh financial start when they cannot service their debts. A creditor cannot use debt collection methods against you after a bankruptcy discharge. However, you might face such efforts even after a bankruptcy discharge.
Other People’s Debts
Ideally, everyone should be responsible for their debts. Thus, you are a victim of zombie debt collection if a creditor harasses you for debts you do not owe.
Causes of Zombie Debts
Zombie debts have both intentional and unintentional causes. Below are a few examples.
Identity Theft
Identity theft occurs when someone uses your personal information, such as your name and credit card number, without your permission. In this context, a criminal may steal your identity and take out loans in your name. If that happens, the creditors might come after you to collect the debt.
Fraudulent Collection
Fraudulent debt collection occurs when a creditor intentionally harasses you for debt that is not yours. For example, a creditor might contact you for debt a family member or friend took. Some creditors do that if they think you are gullible and more likely to pay the money than the real debtor.
Mistake
Zombie debt can also arise from an honest mistake or error. For example, someone might make a mistake and record your debt with the wrong date. If that happens, the creditor might pursue the debt beyond its expiry date. Similarly, a computer error might inflate your debt, causing the creditor to pursue more debt than you owe them.
Protection Against Zombie Debt Collection
Do not take harassment for a zombie date lying down. Protect yourself with the following tips.
Limit Communication With Debt Collectors
You don’t have to talk or engage with zombie debt collectors. Limit your engagements with them because you might inadvertently give away information they might use to harass you further.
Keep Accurate Records
Keep accurate records of all your debt information. Focus on things like:
- Repayment amounts
- Interest rates
- Frequency of repayment
- Repayment period
- Repayments made
The records will help you know the validity of debts creditors demand from you.
Scrutinize Your Credit Records
Your credit records show outstanding debts at any time, among other information. Regularly review your credit records to ensure the information is accurate. That way, you can take remedial measures if something seems off. For example, a loan from an identity theft crime might appear on your credit records.
Request Debt Validation
Debt validation laws require a debt collector to furnish you with some information when they come to collect the debt. For example, the creditor should name the creditor, mention the amount of debt, and give you their name and mailing information. Debt validation can confirm whether you are facing zombie debt collection.
Many people unnecessarily suffer harassment for zombie debts—do not be one of them. Contact Heidarpour Law Firm to protect you from bothersome or illegal collection efforts.