Sorry, I’m just channeling my inner zombie. When you’re in the mood to chop off something on your head, forget about the fictional walkers and consider running into zombie debt.
Zombie debt is a lot less fun than it sounds, but it may be more scary than the undead. It’s the debt – maybe a medical bill or a credit card that you never paid – that is so old that you can’t be sued for paying it. But debt collectors buy up the debt and then try to deceive or convince you to make a payment on it, which will restart the clock on the debt and allow it to start tracking you again.
In the United States, around 30% – or 68 million people – had debt on their credit report in 2019 Urban Institute study. Even at pennies on the dollar, that’s a lot of potential money for zombie debt collectors – aka debt collectors – to scare unsuspecting victims.
The CARES Act does not protect you from private debt collection agencies. However, if there are no court rulings against you, a debt collection agency will not be able to withdraw funds from your account.
And it’s not just that zombie debt is annoying. Negative items, such as unpaid debt, must be removed from your credit report after seven years Fair Credit Reporting Act. If your debt revived, it could be re-reported to the credit bureaus and it could affect your credit score.
So use your old noggin to stop debt collectors with these zombie debt fighting strategies – no machetes required.
How zombie debt is born
Debts start their life when you don’t pay your bill – it doesn’t matter whether you can or not.
After a claim is 180 days overdue, it will be collected. This means that the original creditor can sell your claim to a debt collection agency to collect at least part of the payment for the bill. The agency will in turn (often repeatedly) contact you to collect as much debt as possible.
But debts are seldom sold, repaid, and buried once. One collection agency may sell your debt to another and the next collection agency will sell it on. This could take a while.
Zombie debt isn’t necessarily old debt – it can be a bill you’ve already paid, wiped out in bankruptcy, or misidentified and owned by someone else.
Depending on your state and the type of debt, after three to six years with no payments or activity, a debt is considered past the statute of limitations, which means you cannot be sued for it. But collectors can bargain prices on debts they know are old in hopes of recovering even a small fraction of the money.
Even if the debt has passed the statute of limitations, collectors can still contact you, and if the collection agency can get you to make just one small payment, they can restart the clock on your debt.
And so the zombie debt arises.
How to Stop Zombie Debt Collectors in 3 Steps
If a collection agency calls you about an unrecognized bill, it is important to develop a clear plan of attack to avoid paying you money that is not owed. Don’t be a victim: Here’s how to fight back.
1. Request a confirmation letter
As inconvenient as it may be, answering a debt collector’s call is the first step in getting the zombie debt off your back.
Yes, it can be overwhelming and scary, but this is your chance to take control of the situation. Instead of being harassed and intimidated, ask the collection agency to send you one Debt Review Letters.
If you still owe the debt and want to pay it off, request a secure website where you can make your payment and keep the receipt as evidence – in case the debt is later zombified.
A debt review letter is a legal document that is included in the Fair Collection Practices Act (FDCPA), a federal law of 1977 that provides consumers with legal protection from abusive debt collection practices. Third party debtors are legally obliged to send you the letter on request. They need to include how much you owe, who you owe it, and what options you have to take action.
Read the letter carefully for mistakes. When you have the information in writing, your attack can begin.
2. Send a confirmation letter
They sound similar, but here’s the difference between debt validation letters and debt review letters: a debt collector will send a validation letter stating what you owe, while you send a confirmation letter stating why you didn’t.
By law, you have 30 days after receiving a debt review letter from a collector to respond.
The key here is to specifically go into what was in the debt review letter – this is not the time to share financial information or try to explain your situation. If you’re not sure where to start, we have one Debt review letter template You can expand your zombie battle arsenal.
After you send the letter, the collection agency must stop collecting activities until they send you a review of debt information or a copy of a court ruling. You then have the option of taking the case to court or entering into a payment agreement.
If you don’t get a response, there is a good chance the debt collector was a scam.
But keep all of your records in case another agency buys the zombie debt and tries to prosecute you again.
3. Fight back: know your rights
If you’ve done your due diligence to prove you weren’t responsible for a debt, but the debt collection agency continues to pursue you, it’s time to escalate the battle with the undead.
Learn what to do and who to turn to if you are a victim of unfair debt collection practices::
If you actually still owe the debt and cannot pay the amount owed, contact the debt collection agency to ask for a repayment plan. By Dealing with the debt collector You could negotiate a lower amount directly as the agency did not pay the full amount for your debt anyway.
If the collection agency is unwilling to make or submit an offer that is still beyond your means, you should contact a Credit advisor – Try this out Financial Advisory Organization of America or the National Foundation for Credit Advice (NFCC) for their lists of member organizations.
With a little diligence, hard work, and careful record-keeping, you can bury this debt once and for all.
This article originally appeared on www.thepennyhoarder.com