Newsletter
Zombie Debt
Like many horror movie classics, debt that was once dead may rise up
from the grave and haunt you mercilessly. There are many new companies
popping up that buy charged-off debt from creditors in hopes of collecting
on them. As you may guess, this is causing confusion and problems for
many consumers.
A charged-off debt is when a creditor does not expect to get paid back
from the consumer. The consumer will then have a negative statement on
their credit report for seven years from the documented charge-off. What
these new companies are doing is to buy the charged-off accounts and resume
trying to collect on them. However each state has it statute of limitations
and the collection agency may be violating it by trying to collect.
A collection agency only has so many years to try and collect a delinquent
account. By no means does anyone advise you to refuse to pay your debts
in hopes that it will be charged-off. A charged-off account is one of
the worst things you can allow to happen to your credit report. However,
if you do have an account that has been charged-off and you are being
contacted to pay on it you still have rights as consumers under the Fair
Debt Collection Practices Act.
Some of these new companies that are buying old debts may try to aggressively
pursue you for re-payment. There have even been cases where these companies
have tried to collect on a debt that has been excused through bankruptcy
or the passing of the consumer. So you can see how this can become frustrating
for those who thought that their debt had been taken care of.
If you have experienced this problem or think that you might than there
are some things that you will want to prepare yourself for.
When you first receive a call from the new collectors find out what debt
they are specifically trying to collect on. There could be a chance that
you were not even the original debtor. Some of the information these companies
receive can be false. Then find out if the statute of limitations has
passed or not. If it has passed than legally they cannot try and collect
it from you and you can request that they quit contacting you.
If you know for sure that the statute of limitations has passed it is
best not to talk with the company over the phone. They may try and negotiate
with you and if you agree you may void the original statute of limitations.
If you do still legally owe them due to the fact that the statute of limitations
has not expired, you may want to negotiate with them for a payment plan
or lump payment. This may prevent any judgments or lawsuits against you.
If you are not comfortable with handling this on your own than you may
want to consult a lawyer who can assist you.
If they continue to try and contact you than you can request in writing
for them to cease telephone communications. Make sure you send your letter
certified mail, return receipt requested.
A situation where an old debt returns to cause you stress can be difficult
to handle on your own, especially if the collectors are overwhelming and
aggressive. It may be a good idea to contact a lawyer to assist you or
to defend you against what may be unlawful collection practices.
Make sure that you pay attention to your credit report. Request a free
copy of your credit report at www.annualcreditreport.com (Remember you
can receive one free copy from each of the three credit bureaus per year).
If there is an old debt that has been reposted or there is debt on there
that is not yours, than you will want to actively fight for the removal
of these items. Again, the assistance from a lawyer can help you determine
your options.
If you hear something lurking over your shoulder it just may be a debt
coming back to haunt you, hopefully you are now a little better prepared
to ward off these little monsters.
Pioneer Credit Counseling is a bonded, non-profit credit counseling agency offering debt management programs, financial counseling, bankruptcy counseling and housing counseling nationwide. Call our friendly counselors today at 800-888-1596 or visit www.pioneercredit.com.
Our accredited credit counselors will help you take control of your financial life and get out of debt faster than you can on your own. We offer a debt management program that will stop the collections calls, lower your monthly payment and provide you peace of mind. Our pre and post bankruptcy counselors provide an easy process for you so you can focus on rebuilding your financial being.
It is our policy at Pioneer Credit Counseling not only to help people get out of debt, but also educate in sound budgeting practices.
Pioneer Credit Counseling can help you get out of debt faster. Find out how through one of our Debt Management | Debt Management Programs | Credit Counseling | Financial Counseling | Housing Counseling | Bankruptcy Counseling | Financial Educational Materials
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