How To Kill Zombie Judgement On Your Credit Report
A Zombie Debt is any old debt that is purchased by other debt collectors hoping to scare you into paying on the debt. Typically a zombie debt collector will buy your old debts for pennies on the dollar from other creditors and try to collect as much money from you as possible. For example, if you had an old credit card debt of $2,000, a zombie debt collector could buy that old debt from your creditor for $20 and scare you into paying $100 on it. Typically, zombie debt collectors will call you out of nowhere or send you a letter demanding for payment on a debt that is legally outside the statute of limitation for collecting said debt or is in some other way illegal to collect upon. Often times, debt collectors will offer special deals and discounts for immediate payment, but don’t be fool! Zombie debt collectors use these sneaky tactics because the debt they are trying to collect upon is legally uncollectible and unenforceable in the court of law. Don’t worry; you actually have several tools in your arsenal to fight back against these armies of zombie debt and zombie debt collectors.
Zombie debt is exactly what it sounds like. It’s debt that’s already dead and shouldn’t be living on your credit report. But for whatever reason, it’s risen from the grave and chasing you down. Find out what you need to know about zombie debt and how to deal with it.
How Does Zombie Debt Happen?
The most common cases of zombie debt involve collection activities. Here’s one example of how a zombie might rise with help from a collection agency.
- You default on a debt.
- The original lender or collection agency fails to collect within the statute of limitations.
- The unpaid debt falls off your credit report after a certain amount of time.
- But a separate collection agency, which purchased the debt for pennies on the dollar at some point, revives the debt and tries to collect it.
That collection agency may report the debt as owed to the credit bureaus. Suddenly, the debt reappears on your credit report, except now it’s a zombie debt.
Zombie Debts and Judgments
If the original creditor went to court and obtained a judgment against you for a debt, the zombie debt cycle can be more complicated. It can also seem a bit more vicious.
First, judgments provide the creditor with the legal means to collect via actions such as wage garnishments or bank account liens. How long a judgment is good for depends on the state it was issued in, but most states allow judgments to be renewed at least once. Some states allow judgments to be renewed an unlimited number of times, which makes them potentially limitless.
Judgments can also show up on your credit report for years. In some states, judgments might show up for two decades if the creditor renews them.
Why Is Zombie Debt Such a Problem?
First, if you legitimately owe the debt and it’s still collectible, you could find yourself facing collection activities. That can include wage garnishment or levies. The result can be a difficult financial hit that makes it hard for you to cover your other obligations.
Even if the debt is truly dead and no longer collectible, if it resurfaces on your credit report, it can bring down your score. That makes it harder to get new credit.
How Can You Protect Yourself From Zombie Debt Collectors?
Fans of pop culture movies and comic books know how to kill a zombie. You go for the headshot. But the answer to slaying zombie debt isn’t so simple. How you protect yourself against zombie debt collectors depends on why the debt is sticking around or coming back to life to begin with.
Debts Past the Statute of Limitations
In cases where the debt collector is trying to collect a debt that has been revived past the statute of limitations, the law is on your side. Send the debt collector a letter disputing the debt. Legally, they must halt collections activity until they provide documented proof that the debt is legal and still collectible.
Obviously, zombie debt collectors aren’t always playing by the same rules as others, though. In some cases, they may be aggressive in their pursuit of payment. Make sure you understand your rights under the Fair Debt Collection Practices Act. Stand up for your rights and consider consulting with an attorney if you believe creditors are infringing on those rights. Remember that one of your rights is to an accurate credit report. If a collection agency reports a dead debt that can’t be collected to the credit bureau, you may be able to dispute it.
When Judgments Turn Debt Into the Undead
If a judgment has been entered and the creditor can renew it, the debt could be collectible for years. In some cases, you could be on the hook for decades. There are a few options for dealing with this type of zombie debt. First, contact the creditor that originally secured the judgment. Work directly with them and not a secondary collections agency if at all possible.
Try to negotiate a settlement. The debt is old now, and they may accept a partial payment of the balance and agree to list the collection as paid. Once that occurs, no one else can continue to take action to collect the money from you.
If you can’t afford to settle the debt or you’re dealing with several collection accounts or judgments, you might consider bankruptcy. Bankruptcy converts all debts covered under the plan into secure and nonsecure debts. Then, they’re all treated the same way, regardless of whether a judgment was entered. While you’re under the protection of bankruptcy, no creditor covered by the petition can take any action to collect from you. Instead, they are paid based on a schedule by the bankruptcy trustee. Once the bankruptcy is finalized, the debts are considered settled and paid off.
What should you do if you encounter a Zombie Debt?
Many good, hardworking people would want to pay off these old debts, but even though it admirable, the results of paying back an old debt could be harmful to your credit score.
When facing a zombie debt collector, you should:
- Understanding Your Rights! If you don’t know your rights, it is best to find an attorney who can properly explain the legal restrictions on collections and old debts
- Do not give out any personal information to debt collectors. Don’t trust strangers who are out to get you
- Do not make a payment on any old debt until you learn about the debt and your debts regarding the debt.
Debt Validation
First confirm that you actually owe the debt. The Fair Debt Collection Practices Act (FDCPA) gives you the right and power to verify your debt from debt collectors. Within 35 days of being contacted by a debt collector, you have the right to send a letter to your debt collector requesting they validate and confirm the existence of your debt. The validation they send you must include, but not limited to: documents from the original creditor proving you owe the debt, the amount you owe is valid, and the agency is allowed to collect the debt from you. For Debt Validation to be effective, you should send your debt validation request in writing and it should be send via Certified Mail with a Return Receipt requested.
Statute of Limitations
Second, confirm the statute of limitations of your debt. The statute of limitations on a debt is the maximum time a debt collector can use the powers of the court to legally collect a debt from you. It is good to keep in made that even though the statute of limitations expires on your debt, collection agencies and collectors may still call you and even file a judgment against you in court. If a collector decides to file a lawsuit against you to obtain a judgment, you should be prepared to attend a hearing with evidence that the statute of limitations on your debt has expired if you intend to win the legal battle.
Credit Report Dispute
If you have gone and requested debt validation from your creditor and your debt is still in the 30 day validation period or your debt collector has not responded to the request, the debt collector cannot legally report your debt to the credit reporting agencies. If a debt collector has reported your debt to a credit reporting agency, you can have it wiped from your credit report by submitting a credit report dispute. If you want to make your case with the credit reporting agencies, you should include a copy of your debt validation letter along with the certified and return receipt requests.
Get Help Dealing With Zombie Debt
Battling zombies requires skill and fortitude. So does dealing with zombie debt. If you’re not sure where to start to revive your struggling credit score and slay zombie debt, consider working with a credit repair agency. These professional zombie debt hunters have all the right tools to repair credit, and they can teach you to wield them.