Zombie debt – it sounds creepy and if you don’t understand what it is, your financial standing can be eaten alive.
Zombie debt is another way of describing junk debt, or more officially, delinquent debt. This is debt that has been written off by the original lender and sold to companies that hope to collect a portion of the original amount. The most common types of zombie debt include retail debt, credit card debt, telecommunications debt, and healthcare debt. In some cases, these debts might have been paid, but a mistake in recordkeeping led to the sale of the debt.
Debts have a statute of limitations that protects you from zombie debt collection. The length of time varies, but is rarely more than six years. An attorney can help you determine the date from which the statutes of limitations is calculated and whether or not a debt is still active.
Zombie debt usually rears its head when a person applies for a loan. When changes or updates occur on a credit report, zombie debt collectors gain access to personal information and attempt their collection efforts.
There are laws in place under the US Fair Debt Collection Practices Act to protect consumers from zombie debt collection. Like all collection efforts, zombie debt collectors are prohibited from being abusive or deceptive.
If a zombie debt collector contacts you, do not provide any personal or financial information. Do not acknowledge the debt or agree to make payments. Ask for the contact information from the debt collector and request written proof of the debt. Finally, send a certified letter to the collector disputing the debt and request that their collection efforts end.
If you have fallen victim to zombie debt collectors, you need to take action as soon as possible. Zombie debt can have a negative effect on your financial standing and affect your ability to obtain a loan. Review your credit report on at least an annual basis to ensure everything listed on it is correct. Working with an experienced attorney also makes it easier to put an end to zombie debt collection efforts and get back on track.
If you would like to learn more about zombie debt or you need assistance thwarting aggressive collections efforts by creditors, contact the Law Offices of Robert M. Geller at 813.254.5696
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