Beware of Zombie Debt

Zombie debts can come back years later to haunt you.

With all this talk of zombies in the news, here's another type of zombie you may not have known about.

No, it's not flesh eating zombies, but zombie debt.
Zombie debt is a term that has been applied to debts that were (or so you thought) settled and done. Because debts can be sold from one collection agency to another there is a great opportunity for making money in the reanimation (this is where the Zombie moniker comes in) of a debt you thought was resolved. Knowing about Zombie debt is important because even debt that has been resolved through bankruptcy or resulted from identity theft can come back to haunt you. Some consumers have even been threatened or sued over zombie debt, both practices that could be considered illegal if the debt is fraudulent.

If its illegal why is it happening?
Each state has its own statute of limitations on how long a debt can go unpaid before you are no longer responsible for paying it. However, collection agencies can purchase these debts from the original creditor for just pennies on the dollar allowing them to make a huge profit if you pay on it. Paying on the debt or even admitting that it is yours can reopen the statute of limitations.

So do you really owe on this debt and if not, how do you kill something you thought was dead?
First, find out if the debt is yours and was not paid. Many zombie debts are the result of identity theft, are fraudulent debts or are past the statute of limitations and you are not responsible for paying them. If you are unsure of the debt, do not discuss it with the collector over the phone. Ask for the mailing address of the company and dispute it in writing. If the debt is legitimate and you do not respond to the collection agency, they can take you to court. If you receive notice that you are being taken to court, contact a lawyer and dispute the debt in court with legal representation.

Don't let zombie debt get your credit score, contact Attorney Erwin F. Meiers, III today to discuss your debt.

http://www.investopedia.com/terms/z/zombie-debt.asp#axzz1yuKcpBqV
http://money.howstuffworks.com/personal-finance/debt-management/zombie-debt.htm
http://www.forbes.com/2008/10/31/debt-creditors-default-pf-education-in_af_1031investopedia_inl.html