Zombie debts are an interesting breed of debt. They are cousins of the junk debt but have a few important differences. Zombie debts are debts that come back from the dead to haunt you in later years. These are typically consumer debts that were once credit cards, auto loans, etc. and have now been “purchased” by zombie debt buyers.
In order to understand zombie debts, you have to first understand what makes a debt die.
How a Debt Dies
There are a number of ways a debt can die. The most common way is death by statute of limitations. The statute of limitations is a law that says a debt collector/creditor only has so long to collect on a debt and then that right permanently expires, or dies. In Arizona, many types of consumer debt fall under a 6 year statute of limitations. After 6 years, if the creditor or their successor hasn’t collected on it, they have no further legal right to do so.
Specifically, this means they can’t sue you after the statute of limitations expires. And there’s the rub.
Pretty Please, Will You Pay Us?
When a debt expires under the statute of limitations, it just means that you don’t HAVE to pay. It doesn’t mean that you can’t pay it if you want to. So what zombie debt collectors do is simply ask you to pay. Now, it’s illegal under the Fair Debt Collection Practices Act for them to threaten to sue you or make false statements about the enforceability of the debt to intimidate you into paying. So zombie debt buyers are constantly trying to walk that fine line of “encouraging” you to pay without tipping their hand that you don’t actually have to.
Illegal Conduct by Zombie Debt Buyers
Of course, some of these debt buyers will cross the line and do threaten things they can’t threaten under the law. Consulting with an FDCPA attorney would be a good idea if this happens. Some examples of illegal conduct by zombie debt buyers might include the following:
- Threatening to sue after the statute of limitations expired
- Actually suing you after the statute of limitations expired
- Threatening to report the item on your credit report after the time has passed
- Re-aging the debt on your credit report after the time has passed
- Verbally abusing or harassing consumers
- Representing themselves as attorneys when they aren’t
Other Ways a Debt Can Die
There are some other ways a debt can die, which may include discharge in bankruptcy, prior settlement, etc. Sometimes, zombie debt buyers will try to resurrect these debts as well. Of course, the same rules apply and even more so. There are specific rules about bankruptcy that apply.
What You Should Do if You Have a Zombie Debt Problem
Do Not Admit Owing the Debt
One of the most important things to know is that you should not admit liability for the debt. In some circumstances, this can actually renew the statute of limitations and make an otherwise uncollectible debt now collectible against you. It could even get you sued. Zombie debt buyers know this rule and they may try to trick you into admitting you owe an expired debt.
In general, it’s not a good idea to communicate with a zombie debt buyer. If you’re being pursued by one, it’s best to consult an attorney and make sure your defense is air tight.
Also, if you’ve been sued by the zombie debt buyer, it’s very important you not ignore it. A debt attorney should be able to help you resolve it but you don’t want to get a default judgment against you by ignoring it.
As always, it’s a good idea to have your case properly evaluated by a licensed Arizona debt attorney.