There are several reasons why consumers are harassed by debt collectors for zombie debts. Many times, the consumer has filed bankruptcy several years ago, discharging the debt, but years later the consumer will begin getting calls from a debt collector demanding payment for the debt disharged in the former bankruptcy. Consumer, unable to get in touch with their former bankruptcy attorney, may even end up paying the debt collector for a debt that was discharged in bankruptcy. Consumer should never pay for debts that were discharged in their bankruptcy.
Sometimes, debt collectors will attempt to collect from the wrong person, even threatening to take legal action unless you pay the debt. Other times, zombie debt is a result of identity theft.
The common story behind zombie debts is that when the lenders fail to collect on defaulted debt they sell these “charged-off” debts to debt buyers for pennies on the dollar. These collection companies will then victimize consumers to collect the old debt. Debt collectors are very good at collecting these debts. Consumers should not give in and pay these debts without first getting adequte documenation of the debt from the debt collector.
The debt buying industry has seen a dramatic increase over the last five years due to enormouse profits. Due to the enormous profits, prices for buying these old debts has risen, which has put more pressure on the debt collectors to collect more money, making them even more aggressive. Also, changes to the banruptcy laws in 2005, has emboldened the debt collectors.
Recently, an increasing number of zombie debts have been haunting consumers. This phenomenon is explained in great detail by Richard J. Dalton, Jr. in his article on zombie debt. A number of credit companies are even found to be selling offending accounts to the debt collectors to increase their quarterly earnings. These debt collecting companies will send collection letters, call numerous time each day, report the debt on credit reports, and even file lawsuits in state court in an attempt to collect the zombie debt.
Consumers contacted by debt collectors for zombie debts should demand adequate documentation of each and every debt and should send any demand for documentation to the debt collector in writing via certified mail. The debt collector can be sued if it violates the FDCPA or various state laws. Finally, consumers should not ignore debt collectors when they file lawsuits in state court. Consumers must fight back against these lawsuits or a default judgment may be entered against the consumer for a debt they don’t even owe.
