How to Deal With Scavenger Debt Collectors and Zombie Debt

Scavenger debt collectors can turn your happy, financially content little world into a chaotic nightmare. Scavenger debt collectors are the bottom feeders of the collection industry (as if the collection industry didn’t contain enough bottom feeders). These collection agencies purchase debts that are too old to collect on and then attempt to collect on them anyway. A scavenger debt collector’s weapon of choice? Zombie debt.

Zombie debt is any debt that is so old that most collectors have given up on it. Scavenger debt collectors buy these junk debts for mere pennies on the dollar and then attempt to collect the full original debt, plus fees. A zombie debt may be a debt you accrued 15 years ago on a credit card that has long since been charged off and has aged off of your credit report. Scavenger debt collectors have even been known to try to collect zombie debts accrued by members of your family who are now deceased.

Unfortunately, these junk debt buyers don’t like to play by the rules. You may suddenly find yourself with a derogatory collection account on your credit report for a debt that is far beyond the legal reporting period. A scavenger debt collector may even opt to file a lawsuit against you, fail to serve you a summons, and secure a judgment against you for the debt. You don’t know what has happened, of course, until your wages are suddenly being garnished for a debt you either barely remember or know nothing about. 

Technically, you owe a debt until its paid. Legally, however, you only owe a debt for as long as the debt collector can use a lawsuit to force you to pay up. A statute of limitations exists for each state regarding how long a collection agency has to file a lawsuit against you. This time period is an average of 3-5 years, but can be as short as 2 years or as long as 15 years, depending on where you live. 

Once the debt collection statute of limitations expires, no debt collector has the right to legally sue you. Unfortunately, this won’t stop a scavenger debt collector from trying. Unless you contest the lawsuit and inform the court of the expired statute of limitations on the debt, the scavenger debt collector will wins its case. Remember, a judge has no way of knowing that the debt is a zombie debt and no longer legally enforceable unless you tell him so. The junk debt buyer certainly isn’t going to volunteer that information.

Zombie debt has a nasty little habit of making its way onto your credit report. Most unsecured debts, such as medical bills and credit card debts, have a credit reporting period of no longer than 7 ½ years. That’s 180 days for the original creditor to charge off the debt, and 7 years afterward. Once the original debt “times out” and is removed from your credit report, all collection accounts connected to the debt must also be removed.

Scavenger debt collectors, however, don’t allow a little detail like the Fair Debt Collection Practices Act to stand in the way of collecting. Expect them to slap a new date on the collection account, send it to the credit bureaus, and sit back and wait for it to decimate your credit score for another 7 years. It’s up to you to prevent this from happening. 

Debt validation is a requirement of all collection agencies as outlined in the Fair Debt Collection Practices Act. Through debt validation, a collection agency must prove that you owe the debt. Since the FDCPA does not specify just what a legitimate debt validation is, collection agencies often just mail consumers a printout of how much they want them to pay. 

Luckily for you, the FDCPA also states that if a consumer requests the name and contact information of the original creditor on the account, the collection agency must abide by that request. Should you include this in your debt validation, the scavenger debt collector is stuck. It is highly unlikely that the company has any clue who the original creditor was to your debt, since the debt itself is so old. The debt buyers that owned the debt previously have likely already purged their records and do not have that information. The scavenger debt collector is forced by law to cease all collection activity until it can provide you with the information the FDCPA allows you to request - information that it doesn’t have.

Check your credit report to make sure that the scavenger debt collector has not attempted to update your credit report with negative information long after the reporting period has expired. If a derogatory entry exists, you have the option to sue the debt collector for a FDCPA violation. Often the threat of a lawsuit is enough to have your credit reporting problem quickly remedied. 

The goal of a scavenger debt collector isn’t to break the law. Rather, these collection agencies want to trick you into making a payment in order to sue you legally. Even if the statute of limitations for debt collection has expired in your state, if you make a payment to the scavenger debt collector, no matter how small, the statute of limitations will immediately be reset. This is incredibly problematic, since it gives the collection agency the legal right to file a lawsuit against you for a debt that was previously much too old to collect on - until you foolishly made a payment.

Remember, they can’t do anything to you. Don’t be tricked or threatened into paying the debt. Unless you make a payment on a zombie debt and reset the statute of limitations, no one can force you to pay it. 

You can demand that the scavenger debt collector cease all contact with you as soon as you hear that your zombie debt has resurfaced. If you notify the collection agency in writing that it is prohibited from contacting your further, it can only contact you in order to let you know that it will no longer be contacting you (ironic, I know, but that’s the law for you) or that it plans to take legal action against you in order to collect the debt.

When you send a cease and desist letter to a scavenger debt collector, be sure to include the following information:

• The statute of limitations has expired on this debt. Any attempt to sue to recover the debt is a violation of debt collection laws under the FDCPA and will be met with legal recourse.
• The credit reporting period has expired for this debt. Any attempt to reinsert the debt on my credit report is a violation of the Fair Credit Reporting Act and will be met with prompt legal action.

Never allow scavenger debt collectors to get the best of you by tricking you into paying a debt that you no longer legally owe. Know your rights and defend yourself to send a zombie debt right back into the grave.

Disclaimer: I am not an attorney and this is not to be taken as legal advice. See a licensed attorney in your state for guidance specific to your situation.