Zombie debts
A Zombie in popular parlance is an undead person. Its part of aritualistic belief among the Afro-American people in America. The word however also refers to loans that re-emerge after many years to hauntthe debtor. We all know the statute of limitations for loans is 7 years, but this debt becomes alive again though the statute of limitations is past. The modus operandi of these debts is however simple . Debt collection companies generally buy these obsolete debtsat greatly discounted prices. Though the statute of limitations may have passed yet this does not deter these collection agencies from buying up the debt.
Debt collection agencies follow the adage theolder the debt, the cheaper it is to purchase. The debt may be sold and resold any number of times .Remember a debt after it passes the statute of limitations is legally termed \\'uncollectible\\' . Such a debt cannot be enforced in a court oflaw . The time period for the statute of limitations varies, according to the type of debt and the state . Each state has its own period of limitation. Remember to be aware of the period of limitation in the state you reside . It has an important bearing on any zombie debt thatmay emerge later. Generally the time period may be from 3 to 7 years.However the Fair Debt Collection Practices Act passed in 1996 is a federal act and applicable all over the United States. This is an important piece of legislation and lays down the parameters of actionof collection agents and agencies. As with all legislations there are unscrupulous people who may not follow this act . Debt collectors will still go for debts that may even be too old for legal collection .
Themodus operandi of these collectors is simple. They will do research and come across old unpaid debts . They then contact the original lenders and buy the debt from them at throw away prices . They thenfollow the next logical step and contact the debtor. They will try andcollect whatever amount can be collected . In this process thecollectors could use unethical methods like abusive telephone calls,threats and other types of harassment.I must however enunciate a general warning to all Americans who havebeen contacted by the recovery agent. Make it a point not to talk to the person who has approached you regarding your old unpaid debt.Secondly never send a small payment with the hope that the debtor will let you live in peace. This will never happen and you will be suckedinto a whirlpool as the debt would get renewed.
There are also cases where debts that had been discharged in bankruptcy, or which were so old they had been removed from their credit report have started reappearing. This could be disturbing. Ifthis happens then start by checking your credit report regularly and dispute with the credit bureaus anything that is old, inaccurate, orincomplete. If you\\'re contacted by a debt collector, request validation of the debt . Also be familiar with the statute of limitations as applicable to the state you reside .Be informed. Contact your state\\'s Attorney General\\'s Office, the Better Business Bureau, AND the agency that licenses debt collectors in your state (usually the department of finance) andcomplain about your account being re-aged . There is no point beingscared of Zombie debts. If a zombie debt occurs than assert yourrights .The debt-buying industry is on an upswing and some companies haveearned hundreds and even thousands of dollars by buying these zombiedebts.
Thus there are cases of thousands of consumers getting harassedby collectors trying to cash in on debts that are no longerenforceable in court of law or beyond the statute of limitations.There have been cases where a collection agency has contacted personswho had a debt at least 9 or 10 years old. These people thrive on theignorance of the consumers and play on their psychological fear ofgoing to jail. When a debt becomes seven years old, in most cases itshould be erased from your credit report. The fact that the debt isnot paid in full or has lapsed has no effect and can be ignored. Overthe passage of time there is a good chance that your lender orcreditor has most probably written off the debt as a loss. But debtcollection firms and their agents will not be stopped by this. Theywill take any uncollected debt and buy it at a fraction of theoriginal cost. These collection companies are aware that there is agood chance that they will not be able to collect all the debts .However if they are able to collect a few of the debts, they can stillmake a lot of money .Sometimes they will engage in illegal activitiesto do so .
One of these practices is to report the old debts to thecredit bureaus as if the debts were new, uncollected bills . This isofficially referred to as re-aging and is illegal. Zombie debt is agrowing problem because it is an effective way to earn money byapplying pressure on a person to pay old debt. Once the debt reappearsin the credit report the result can be quite a shock. This shocktherapy is the essence of the debt collector\\'s arsenal. The debtcollector may then make what may seem a reasonable offer. He willoffer to report the debt as paid if the person will pay a part of thedebt. Never do this as there is a good chance that your debt maybecome alive again. In case your credit report shows a zombie debt than you\\'reimmediately contact the credit bureaus. If proof is available thatshows the debt is over 7 years old or the debt was discharged inbankruptcy court, then the debt is easily removed from your creditrecord. If however you don\\'t have proof, then contact the credit bureaus again .
Also demand proof about thelegality of the debt from the collection agency . Legally the collection agency is bound to give you information about your debt within 30 days. If they fail to give you this information then the debt collection agency has no charge on you . In case the debt collection agency still persists in collection ,then do report the matterimmediately. Remember under the federal Fair Debt Collections Practices Act these collectors could face a massive civil penalty as well as fraud and harassment charges. There have been many successful instances of such cases. Remember even if the debt was legitimate and previously in your credit record, claiming it again, asecond time is again an illegality.Zombie debts are phenomena that cannot be wished away. But, if you keep yourself informed and follow the rules there is no reason why any zombiedebt could disturb your sleep.
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