Zombie or Credit Card Debt – How to Drive a Stake through its Heart

We call certain kinds of debt “Zombie debt” because it is, for some reason, undead. It could be very old debt left over from a terminated account several years ago. It could be debt that has already been discharged in bankruptcy or settled by agreement with the creditor. It could even be debt that you never legitimately incurred in any way, as for example, debts incurred through identity theft. All of these forms of debts should be dead, but sometimes they come back to haunt you.

The way zombie debts come back to haunt you is very simple. They are sold to debt collectors. The debt collectors then try to collect on the debt without any real concern for its legitimacy. They will frequently use all the usual tricks to collect, from calling or writing, to threatening with litigation, to actually filing suit and pursuing you into court. Back when people were still getting loans, sometimes the lenders would see a debt on your record and require you to pay it as a condition of receiving the loan-regardless of the debt’s legitimacy.

In any event, the common characteristic of zombie debts is that they have somehow come back to haunt you long after you thought they had disappeared. How can you deal with them?

Under the Federal Fair Debt Collection Practices Act (FDCPA), you have the right to require a debt collector to “validate” a debt. To do this, you simply write the debt collector within thirty days of its contacting you and state that you dispute the debt and want them to validate it. Fairly often this will be enough to get rid of the debt collector-for a time. If you do this every time you receive a debt collection letter, you will begin to take charge of the situation. The debt collector must “validate” the debt prior to taking any further action against you, although you should know that this is truly a very small burden. A phone call to the initial creditor to confirm its claim against you will often be enough under the FDCPA.

The next arrow in your quiver is the Federal Fair Credit Reporting Act (FCRA). If the debt collector is reporting your debt as unpaid, or negatively in any way, you can dispute the debt. You write a letter to the credit reporting agencies, disputing the debt and mentioning the FCRA. This is supposed to require the credit reporting agencies to “investigate” the debt. Again this is a potentially almost negligible requirement, and the reporting agencies sometimes do no more than call the person claiming you owe the money. But this time any false statement from the debt collector will violate the FCRA and give you the right to sue it. Since this right carries a claim for attorneys fees, it is more alarming to the debt collectors. The right to attorneys fees makes it more likely you can get a lawyer to represent you.

Remember that your letter disputing your debt initially is to the debt collector.

Your second letter disputing the debt is to the credit reporting agencies, and you must send letters to each of the credit 債務舒緩 reporting agencies.

If the debt collector persists, and if the debt is illegitimate or beyond the statute of limitations, or if the debt collector lies in its report to the credit reporting agencies, then you have a legal claim against the debt collector, and a lot of lawyers like to take them because of the attorneys fees provisions under the federal law. There are other possible claims under most states’ laws.

If the debt collector pursues the matter into court and attempts to collect the debt, then you can defend yourself in the ways my web site shows you. A successful outcome is usually a stake in the heart of the zombie debt.

 

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