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 (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

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.

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