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Blog Post What is Zombie Debt?

  • Trial Court Law Libraries

The Federal Trade Commission described zombie debt as “a debt that you think is dead, gone, and forgotten, but has somehow come back to life”. The debt is obtained by collectors who purchase old debt from the original creditors and/or debt collection agencies for a minimal expense with the intent to secure the monies owed, even if it is only a portion of the original debt. (Note: above link to FTC page is an archived version. Updated information can be found at the following Nolo page Debt Scavengers and Zombie Debt)

Generally, there is a six year statute of limitations for filing a lawsuit to collect upon a debt, and a seven year statute for reporting bad credit, but there is no statute of limitations on billing for bad debts.

Example of zombie debts include:

  • Debt that isn’t your debt, i.e., identity theft
  • Debt that is no longer on your credit report
  • Discharged debt due to bankruptcy
  • Debt past the statute of limitations

You can protect yourself from zombie collectors by:

  • Requesting documentation
  • Refusing to speak to anyone who calls
  • Don’t admit that you own the debt
  • Don’t remit payment until you identify the debt as yours
  • Be aware of the Statute of Limitations

The Fair Debt Collection Practices Act , is the primary federal law governing consumers’ rights in debt collection and spells out rights and responsibilities when collecting debts.  Massachusetts General Law c. 93 § 49  is clear that debt collectors shall not collect or attempt to collect such debt in an unfair, deceptive or unreasonable manner.  More on debt collection can be found at Massachusetts Law about Debt Collection.

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