Quick Answer: Zombie debt refers to old, unpaid debts that companies sell for pennies on the dollar to third-party collection agencies who then pursue consumers for payment. These debts may be past the statute of limitations or already paid, making aggressive collection tactics potentially illegal.
Have you ever received a letter or phone call asking you to pay a debt that you’re not sure you owe? If so, you may be the target of zombie debt collectors. What is zombie debt? How does it rise from the dead? What you can do if zombie debt starts its relentless lurch toward you?
It has become increasingly common for companies to sell their old, uncollected debts for pennies on the dollar to third-party debt collection agencies. Credit card companies, telecommunications companies, gyms and health care facilities want to get these bad debts off their books, so after a period of several months of nonpayment, they will turn your bills over to a debt collection agency. Sometimes the debt is sold to the collector, which gets to keep every penny it collects, and sometimes the collected debt is returned to the original creditor with the collection agency retaining a fee or a percentage of the collected debt as compensation.
Beware Of Zombie Debt Collectors Forbes, NY – 15 minutes ago Read “Debt Consolidation Made Easy” to learn five steps to help you get out of debt faster.) The statute of limitations on debts varies by state, …
Each weekday I send one short email: one money story that caught my attention, why it might matter to you, and one manageable thing you can do with it. A couple of minutes, and a dad joke.
In the latest issue (Oct 9): Does Financial Literacy Make Financial Sense?
Free. I sell nothing. Unsubscribe any time.
Click Here for totally free debt help, advice and answers.
Source: Beware Of Zombie Debt Collectors
Know Your Rights: If a debt collector is contacting you, you have legal protections. See the complete list of FDCPA violations collectors commit most often. Use the free Debt Validation Letter Generator to demand proof of the debt, or check this collector’s complaint history with the Scam-O-Meter.
Dealing With Debt? Before you pay a collector, understand all your debt relief options — including ones the collector won’t tell you about. If the debt feels unmanageable, take the 2-minute bankruptcy quiz to see if the math favors a fresh start. Federal Reserve research shows filers recover faster than those who don’t file.
