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What is zombie debt? It's that debt from long ago that you thought you had buried but that rises again to haunt you. Notification of that debt could come in the form of a phone call, a letter or even a notice that you've been sued and need to appear in court. It's undead debt that's risen from the grave, refuses to die and is now chasing you. If you receive a phone call or letter about a zombie debt, here are some things that you should do.
Know your rights
Financial experts say that the first thing that you need to do if you encounter zombie debt is to learn your rights. You should visit the website of the Federal Trade Commission's guide to old debt and your rights. You should also look up your state's statue of limitations on debts, which can be anywhere from two to 15 years. If the statute of limitations has expired on your debt, that debt collector cannot sue you successfully.
Be careful, be very careful
Proceed with care. There are certain options you could take that would cause the debt to "re-age" if it’s passed the statute of limitations. Don't make even a small payment on that debt or even promise to pay it. This could reset your clock, which would allow the debt collector to sue you.
Make sure the debt is yours
If it's been many years since you incurred the debt, you may not even recognize it. One of the toughest things about zombie debt is you may not even know what the collector is talking about. In fact, the debt may not even be yours. Make the collector prove that it really is.
Make sure the amount is correct
By the time the agency that purchased the debt gets around to trying to collect it, there may have been many fees added to it so that it's hard to know how much you really owe. In fact, it would not be unusual for you to remember that you owed $200 on a debt but have now received a notice claiming that you owe $1,500 or more.
Get verification and documentation
Write the debt collection agency and request documentation of the debt. Ask for a copy of the original contact, along with the details and date of the last payment. You should also ask for proof that the collection agency really owns the debt. There is such a thing as fraudulent debt buyers – or agencies that try to collect on debt they don’t even own.
Make an offer
If you determine that the debt is yours, that the amount is correct and you've verified that the company that purchased the debt actually owns it, you might offer to settle. As an example of this, if owed $500, you could contact the company that purchased the debt and offer to settle it for $250 or less. The fact is, most of these companies who buy debt would love to get a 50% of what you owe if it’s in a lump sum.
Hire an attorney
If you are being sued or if you are just having a problem sorting things out, you might want to consult a consumer attorney who does debt collection cases. An attorney can not only defend you, he or she could help determine if the company has violated the Fair Debt Collection Practices Act (FDCPA) or other laws. If it has violated the FDCPA, you could sue the collection agency and might get up to $1,000, plus your attorneys fees.
How to deal with non-zombie debt
If the debt that's plaguing you is not zombie debt, you may want to contact us to discuss debt settlement. We've helped thousands of families reduce their debts and become debt free in a reasonable amount of time with affordable payment plans.