How Zombie Debt Works

How to Deal With Zombie Debt Collectors

Living economically after transferring her $10,000 debt to a zero-percent interest credit card, Danielle Rhoades was able to pay off her debt in a year.
Living economically after transferring her $10,000 debt to a zero-percent interest credit card, Danielle Rhoades was able to pay off her debt in a year.
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Some of the worst problems with zombie debt arise when the debt appears just as a consumer is making a major purchase, such as a house or a car. Confused about their rights or simply anxious about obtaining their new loan, many consumers pay old debts to settle the issue quickly. And some people fall victim to a one-two punch of identity theft and their own poor record keeping: They wind up paying debts that weren't even theirs in the first place.

So what do you do?

  • Know your rights. Debt collectors are not allowed to threaten you, harass you, or threaten to sue you.
  • Don't acknowledge that the debt is yours, or even that you recognize it.
  • Get things in writing. Ask for information about where the debt originated -- when, from whom, for how much. Check that information against your credit report and your other records.
  • If you don't owe the debt, send the collection agency a written demand to stop contacting you. Send it certified mail, with a return receipt, and send it within 30 days.
  • Get a discharge order. Have you filed for bankruptcy since then? If so, your discharge order should protect you from attempts to collect this debt.
  • Determine the age of the debt. After six or seven years, you have certain protections under federal law.
  • Know your states statute of limitations. In some states, you may actually injure your credit rating further by making a payment on the debt. You might reopen the debt's statute of limitations. And the collector, having succeeded in obtaining some money, might try to pursue the rest. Though no one condones defaulting on your obligations, some consumer advocates say that in this situation, your best option is to ignore the zombie debt collector. Even if you don't dispute the debt, no court may consider your silence "an admission of liability" [source: Federal Trade Commission].
  • Be smart about your finances. Don't wait for a problem to arise. Pay your bills on time, and check your credit score routinely. If you're planning a major purchase, be familiar with your credit report well in advance.

­If we've learned anything from the movies, it's this: There are ways to keep zombies from eating your brain. Bar the doors, choose and understand your weapons, figure out your escape route, and you may soon find yourself victoriously standing down the debt apocalypse.

If you'd like to learn more about zombie debt, you can follow the links below.

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More Great Links


  • Anderson, Kent. "What Is Zombie Debt and Why Is It a Problem?" Bankruptcy Law Network. November 7, 2007. (April 7, 2008) it-a-problem/
  • Anderson, Kent. "Zombie Debt." Glossary of Common Terms, Kent Anderson Law. 2007. (April 7.2008)
  • Dalton Jr., Richard. J. "Consumers Haunted by 'Zombie Debt.'" February 10, 2008. (April 3, 2008).
  • Federal Trade Commission. "Fair Debt Collection Practices Act." September 2007. (April 3, 2008)
  • Weston, Liz Pulliam. "Zombie Debt Is Hard to Kill." MSN Money. July 24, 2006. (April 7, 2007)
  • Yochim, Dayana. "Return of the Living Debt." The Motley Fool. October 28, 2004. (April 3, 2008)