WHAT IS ‘ZOMBIE DEBT’?
As a firm that has multiple practice areas, including bankruptcy and other debt defenses, one of the biggest questions we often get concerns ghost debt or zombie debt. So, what is zombie debt? It’s debt you thought was dead a long time ago and then, when you least expect it, comes back to haunt you. Many times, it is something you have completely forgotten about. Just because you don’t hear about a debt for several years or the debt was “written off” by a creditor does not mean the debt is no longer owed. Nothing could be further from the truth. The debt is still out there lingering … somewhere . The real issue is whether a creditor or debt collector can collect the ghost or zombie debt legally? Believe it or not, debts can be owed for a very long time. To keep track of your debts and your sanity, keep a file folder on all debts you owe. Of course, you can do this on your computer in an electronic file format as well. If you pay your bills electronically each month, you will have a conveniently created record of when the debt was due, how much was owed, and the due date. After payment is made, you will know how much was paid, when it was paid, and when the payment was received. In both of the aforementioned scenarios, you will be glad you kept careful records because, when it comes to your credit report, the creditors often get the tradelines wrong. They will try to keep the debt on your credit report as long as possible, so it hurts you. A tradeline on your credit report contains information reported to the credit reporting bureaus by either the original creditor to whom you owe money or, if a loan goes into default, the debt collector. If an organization reports to the credit reporting agencies, they are under a duty (under the Fair Credit Reporting
Act) to accurately report the information. Many times, though, they do not.
However, if you fall behind on a bill, it’s very important to know the last day you made a
payment, as the statute of limitations in Florida begins to run when default occurs. The statute of limitations will determine the time frame that a debt can be collected using the court system. Once outside the statute of limitations, a creditor who tries to use the court system to collect a debt may
be opening themselves up to a consumer law violation. But very few people know a creditor can still attempt to collect a debt beyond the statute of limitations as long as they are not utilizing or threatening to utilize the court system to do so. Likewise, you want to keep track of any changes in ownership. You may receive a letter from your mortgage company telling you they are transferring the servicing rights to another organization. That is not a letter you want to throw away. You want to save this letter and make a record of it so you know you are sending your mortgage payments to the proper entity each month. Unfortunately, writing the rules and stipulations on whether or not you think a debt is too old to be collected or the wrong company is asking for money (in this short story) isn’t black and white. Each and every case is so unique that we can only tell you the most lawyerish statement you’ve ever heard.
Which is: It depends.
“I did my research thoroughly before choosing the Dellutri Law Group, and with so many choices to choose from with lawyers, I rolled the dice on them to handle my case. I don’t think my life will ever be the same without their help, and though at this point my future depends on my choices, I’m always thinking about everyone’s help along the way and know as long as I need a lawyer, the Dellutri Law Group is going to be my first choice!” –J.M. GOOGLE REVIEW, JUNE 2022 Testimonial Our Clients Say It Best
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