We recently came across a couple of Internet articles about the "Attack of the Zombie Debt," such as this one from Squidoo.com and this article from money.msn.com. Despite the eye-catching name, which brings to mind the now popular walking-dead movies from the '60s and '70s, unfortunately Zombie Debt is all too real.
- What is Zombie Debt?
Zombie debt is debt that is alive in the eyes of a debt collector, even though it should have died long ago. This debt should be "dead" because either the "debtor" filed and completed a bankruptcy, or because the debt has gone unpaid for so long, and is so old, that the statute of limitations (generally four or five years in Nebraska) has expired. As the linked articles demonstrate, however, for one reason or another, zombie debt is indeed "alive" in many instances.
- I filed bankruptcy on this zombie debt - What action should I take?
Review your situation with an experienced consumer bankruptcy lawyer. Discuss the zombie debt with the lawyer that filed your bankruptcy, and provide him/her with the name and address of the collection agency trying to collect the debt. At Steffens Law Office, when our past bankruptcy clients are attacked by zombie debt, we send a letter to the collection agency informing them that the debt they are trying to collect was discharged in the bankruptcy. We take this action without further legal fees. If the collection agency ignores our letter, we recommend that our client pursue an action against the unscrupulous debt collector for violation of bankruptcy law.
- I never filed bankruptcy, but I'm being attack by Zombie Debt that should have died because the statute of limitations expired - what action should I take?
Dispute the debt with the collection agency by sending a letter, requesting a “validation” of the debt from the collection agency. This needs to be done with in 30 days of the collection agency's first written demand for payment from you. A lawyer can also perform this task for you. Attached is a linke to a sample validation letter. If the collection agency fails to validate the debt, but instead, continues to try to collect the debt through the mail, email, or telephone, crack a smile and call the lawyers at Steffens Law Office. The collection agency just violated the Fair Debt Collection Practices Act, and you may be entitled to money damages from the debt collector.
- I've been sued on a Zombie Debt - what do I do?
Contact a lawyer experienced in debtor-creditor law immediately. If indeed the zombie debt should be dead, either because you filed bankruptcy or the statute of limitations has expired, again, you may be entitled to money damages from the debt collector.
- How do I protect myself from Zombie Debt?
You should obtain each of your credit reports from annualcreditreport.com once every twelve months. This is absolutely free. You can alternate which report you request (from Experian, Equifax, and TransUnion) every four months. Depending on the situation, the debt may or may not be reported on your credit report, because either you filed bankruptcy or the debt is more than 7 years old. Request our free information report: "How to Dispute Erroneous Credit Reporting."
Whatever you do, proceed with caution. We warn against simply making payment on the zombie debt because, unless you have filed bankruptcy, a payment could arguably restart the statute of limitations. If you have other questions about Zombie Debt, call the Steffens Law Office. We have over 50 years combined experience in debtor/creditor work, and we personally look forward to helping you.