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zombie Debts
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Voodoo is a derivative of the worlds oldest known religions from Africa that migrated to Afro American people in America. Zombie is part of this voodoo belief and denotes an undead person. Zombie debts gets its name because its debt that seems to rise from the dead.
This type of debt is resuscitated back to life like a zombie. Such debt surfaces even if its past the legal statute of limitations which is 7 years. Generally these obsolete debts are purchased at a heavy discount by debt collection companies. These zombie debts keep springing back to life. Some of them may be seven or 10 years old. The principle of purchasing this type of debt is simple. The older the debt, the cheaper it is to purchase. The debt may be sold and resold any number of times. At some point, it passes the statute of limitations. Once that happens the debt becomes legally uncollectible. The time period for the statute of limitations varies, according to the type of debt and the state. Generally the time period may be from 3 to 6 years. In the United States each state has its own statute of limitations. The Fair Debt Collection Practices Act passed in 1996 spells out the dos and donts for a collection agency . Unfortunately, despite the passage of this act collection agencies do not follow this act in letter and spirit and subvert it to further their cause. Despite the fact that some debts may be too old for legal collection, yet this is not a deterrent for debt collectors. These collectors buy the debts at throw away prices and then proceed to get whatever they can from the debtor. In this process they may use unethical methods also like abusive telephone calls, threats of lawsuits etc. They may even indicate the prospect of a jail term in case their requests are not complied with. A general warning to all consumers who owe old debts needs to be paraphrased here. Any person receiving a call from a collection agency should never talk to the agency. Also never send a small payment and try to get them off your back, because this action can get the wheel moving again and renews the original debt.
There have been cases where debts that had been discharged in bankruptcy, or which were so old they had been removed from their credit report have started reappearing. If this happens then start by checking your credit report regularly and dispute with the credit bureaus anything that is old, inaccurate, or incomplete. If you're contacted by a debt collector, request validation of the debt and be familiar with the statute of limitations for your state. The age old adage that ignorance is bliss does not apply here. So be informed. Contact your state's Attorney General's Office, the Better Business Bureau, AND the agency that licenses debt collectors in your state (usually the department of finance) and complain about your account being re-aged. Dont be scared of zombie debts. If a zombie debt occurs than assert your rights and there are resources available that can help you. The debt-buying industry is on an upswing and some companies have earned hundreds and even thousands of dollars by buying these zombie debts. Thus there are cases of thousands of consumers getting harassed by collectors trying to cash in on debts that are no longer enforceable in court of law or beyond the statute of limitations. There have been cases where a collection agency has contacted persons who had a debt at least 9 or 10 years old. These people thrive on the ignorance of the consumers and play on their psychological fear of going to jail. When a debt becomes seven years old, in most cases it should be erased from your credit report. The fact that the debt is not paid in full or has lapsed has no bearing on this. Over the passage of time there is a good chance that your lender or creditor has most probably written off the debt as a loss. But debt collection firms and their agents will not be stopped by this. They will take any uncollected debt and buy it at a fraction of the original cost. These collection companies are aware that there is a good chance that they will not be able to collect all the debts. However if they are able to collect a few of the debts, they can still make a lot of money .Sometimes they will engage in illegal activities to do so. One of these practices is to report the old debts to the credit bureaus as if the debts were new, uncollected bills. This is officially referred to as re-aging, but is commonly referred to as zombie debts. Re-aging debts is illegal. Zombie debt is a growing problem because it is an effective way to earn money by applying pressure on a person to pay old debt. Once a person has had the debt erased from their record, they are shocked to see it appear again. This is exactly what the collection agencies hope for and will often offer to report the bill as paid if a person will pay a part of the debt. In case zombie debt has appeared on your credit report; than your best course of action is to directly contact the credit bureaus. If proof is available that shows the debt is over 7 years old or the debt was discharged in bankruptcy court, then the debt is easily removed from your credit record. If by chance you dont have proof, contact the credit bureaus again and demand from the collection agency proof that the debt is legitimate and recent. First and foremost, demand proof from the bill collector about your zombie debt. Its mandatory for the collection agency to provide this information within 30 days. If they are unable to do so than you are free. In case a bill collector attempts to collect monies for a bill that has been paid long back and can provide no proof of the debt, then promptly inform against them. Remember under the federal Fair Debt Collections Practices Act these collectors could be subject to a massive civil penalty plus fraud and harassment charges. There have been many successful instances of such cases. Generally, if the zombie debt is less than a few thousand dollars and over five years old, than most probably this debt has been written off by the creditor long ago. In many states, the statute of limitations for debt collection is just two years, so if the claimed debt is over two years old and there is no court judgment against you, you are again free. Remember even if the debt was legitimate and previously in your credit record, claiming it again, a second time would be an illegality. The credit reporting service should correct this at the first instance.
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