How to Slay Zombie Debt in 4 Steps

A zombie debt is an old bill that’s come back to haunt you. You have a few ways to handle it.

Tiffany Curtis
Sean Pyles
By Sean Pyles and  Tiffany Curtis 
Edited by Kathy Hinson

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A zombie debt is typically an old debt that has fallen off your credit report, you no longer owe or has expired, but a debt collector has revived it — and is asking you to pay. Tread carefully when confronted with the specter of a zombie debt.

What is zombie debt?

In many states, statutes of limitations on debt — usually between three and six years — prevent creditors from taking you to court over older debt. But debt collectors can buy old debt from the original creditor at a low cost and then try to collect. Collectors can profit even if they collect only a portion of the original debt, so they have incentive to resurrect old bills years after the debts were incurred.

Common sources of zombie debt include:

  • Debts you do owe but forgot about.

  • Debts you already settled with a creditor.

  • Fraudulent charges from identity theft.

  • Debts wiped out in bankruptcy.

  • Debts beyond the statute of limitations for when you can be sued for payment.

Here’s how to bury your zombie debt in four steps:

1. Make sure the debt belongs to you

A zombie debt might be a dormant bill resurrected by debt collectors — or it could be something you never owed at all. The debt could be past the statute of limitations, meaning you can’t be sued for payment.

Before you give any money to debt collectors, be sure to look into their claims and make sure the debt actually belongs to you. Ask for a debt validation letter. This letter will outline details including the original creditor, the amount of the debt and how you can challenge it. This will help you verify that it is your debt and hasn’t already been paid.

Be careful: Making even a single payment on an old debt can bring it back from the dead.

Creditors regularly remove old debt from their books and sell it to third-party debt collectors for cents on the dollar. But as debts are sold and resold, information can decay, leading collectors to seek payment on an erroneous debt.

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2. Gather the facts on your debt

Dig through your old records, such as receipts and bank statements, to get as much information as you can on the debt and proof of its payment. This will be your defense if you don't owe the debt.

Consumers should “get as much information as possible before making a decision,” says April Kuehnhoff, senior attorney with the National Consumer Law Center. “Even if you’re feeling pressure during a phone call, don’t agree to even make a $20 payment.”

3. Determine if the debt is past the statute of limitations

Ask the debt collector or research your state’s laws around time-barred debt. You cannot legally be sued for a debt that’s past the statute of limitations, although collectors may still try.

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4. Pick your method of attack

If you already paid the debt: Write a letter to the collections agency demanding that it cease contact. The Fair Debt Collections Practices Act requires it to do so.

If it’s not your debt or is otherwise invalid: Write a letter challenging the debt within 30 days of first contact.

If you do owe the debt and can pay: Resolving an unpaid account can get it out of your life and perhaps help your credit score. Get any payment agreement in writing before sending money.

If you do owe it and can’t pay: Pursue debt relief through credit counseling or bankruptcy.

No matter what, be proactive. Don’t ignore anything you receive in the mail from debt collectors, and get everything in writing.