No I’m not kidding there is a thing as Zombie Debt, and it’s as scary as the name no kidding. Zombie Debt refers to debt that is “OLD”, which means it is pass the Statue of Limitations to even collect. The Federal Trade Commission (FTC) who provide guidance to the general public regarding debt collectors has another name for Zombie Debt , which is “Time Barred Debt”. Zombie Debt or Time Barred Debt cannot be collected by a debt collector after so many years; but here is the caveat, debt collectors will still contact a consumer on an old debt because they know that most individuals do not know that the debt is uncollectible.
So what should consumers do to avoid being a victim of paying on Zombie debt that is pass the Statute of Limitations. Here are four tips to help you with dealing with debt collectors who are trying to collect on old debts.
- Understand Statue of Limitations Every state in the US has a different SOL period on how long a debt collector can collect on a debt. In some states the it could be 3, 6 or even 10 years from the time the debt was charged off by the creditor. In order to use SOL as a defense you have to know the usury laws of your state.
- Do not Pay on the Debt – It is important that you know what is the SOL for the debt, because if the time period is over and the debt is considered a “Time Barred Debt”. You will restart the SOL regardless if the Statue of Limitation period is over in your state.
- Validate the Debt – Always request and send a Debt Validation Letter if you want to keep a paper trail on the debt, if you are not sure of the SOL. A debt validation letter will help you in the future if the debt collector tries to sue you in court.
- Send a letter - If you know that the debt is “OLD” and you want to stop any further communication from the debt collector, send a letter requesting that all communication should be stopped immediately. If you want to see a sample letter for getting rid of Zombie Debt collectors, Check out this letter here.
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