Zombie Debt Abuse Continues

Zombie debt is debt that never dies.

Zombie debt
Zombie debt never dies

It keeps getting sold and re-sold.

How does Zombie Debt affect you?

Most consumer debt that is in default

is now sold to bottom feeding third party

zombie debt buyers.

I had a case where my client sued a debt collector for illegal harassment.

That defendant said, hey, we sold that debt to company B.  So we added company B.

Their lawyer said hey, we sold that debt the day we bought it, to company C.

Company C never showed up, and we got a default judgment against them.

And?  They were out of business.

Most consumer debt, credit cards and so on, even private student loans, is sold after it has been in default for a short time.

So, you get a bill from someone you never heard of.

What to do about Zombie Debt Collectors?

DON’T PAY THEM.

They use threats, which frequently violate the Fair Debt Collection Practices Act. (FDCPA more on that later)

If you are not sure what to do, contact me.

Our species avoids pain, and seeks pleasure.  Zombie debt collectors seek to inflict pain that you can avoid by sending them money.

They skip over the part about proving that you even owe them money.

John Matarese posted about this:

Sam Powers received a frightening call on his cell phone, claiming someone was filing a civil complaint against him.

“When I first listened to the call, my heart went in my throat and I said ‘Oh my gosh, what did I do?'” he wondered.

The woman on the phone said she was with a law firm, and told him that “failure to respond may result in immediate legal action.” Powers didn’t know what to do.

“I got a little information online, but I couldn’t find this law firm, couldn’t find any information at all.”

We checked the number that called him, and found no company connected to it.  We found only complaints about similar threatening calls.

An attorney who specializes in debt calls calls thesezombie debit collectors,”and says they try to scare hard working people into paying debts that may not be theirs.

Under the FDCPA, you can (and should) send a debt validation letter.  Which simply states, send me proof that I owe this debt.  I deny that I do.  That is, if you can get an address out of the collectors.

What if they sue me, like they say?

Great!  That may be another FDCPA violation.  My experience is that they can seldom back up their allegation, that they bought the debt, with paper proof.

This is a business model based on you not fighting back.  Most civil suits are now filed by zombie debt collectors.

Most folks who are sued do not respond, so the zombie debt gets a default judgment.  Never having had to prove anything.

Zombie debt collectors do not want to spend the money to prove they own the zombie debt,

Or, maybe they do NOT own it.

The last zombie debt suit I defended, the zombie debt buyer just dismissed the case, with prejudice, meaning they cannot sue my client again.

 

 

Digiprove sealCopyright secured by Digiprove © 2017 Kurt O'Keefe

More “Debt Relief” Lawyers Shut Down

The Consumer Protection Finance Bureau (CPFB) nailed some debt relief lawyers for FRAUD in tricking consumers into parting with their money for “debt relief.” Which turned out to relieve them only of their money and enrich the debt relief lawyers in the firm. What Is Debt Relief? Debt relief lawyers, and other scammers, use scareContinue Reading

Zombie Debt, FDCPA, and Bankruptcy

Zombie debt is debt that never dies. What keeps zombie debt alive? The multi-billion dollar debt buying industry. We live in an age of core competence and outsourcing. So, VISA and Mastercard and other big creditors make minimal efforts to collect overdue accounts, and then, sell them. For pennies on the dollar, of course. WhyContinue Reading

More Debt, More Debtor Harassment

More consumer debt always leads to more bankruptcy filings. Does more debt lead to more debtor harassment? The November data are in, and, yes, consumer debt, that month of big Christmas shopping, went way up. Having read the latest Consumer Protection Financial Bureau consent judgment against a debt collection law firm, I wonder if there isContinue Reading

Bankruptcy and Interest Rate Increase

The Fed increased interest rates 25 basis points,   that is, .25%, and, the banks followed along. Lots of consumer credit is tied to “prime” rates set by banks. Which uniformly go up when the Fed raises its rate, which is why the Fed raises that rate. How Much Consumer Credit Is Tied To PrimeContinue Reading

Consumer Bankruptcy Updates

Bankruptcy news

Well, updating the last post, Teresa Giudice won the motion to approve the settlement splitting proceeds of her yet to conclude malpractice lawsuit against her bankruptcy attorney with her creditors. What’s the Bankruptcy News? Rowan & Martin’s Laugh In TV had a weekly sketch: “What’s the news?” so that is why I stuck the pictureContinue Reading

Thankful For Bankruptcy

thankful for bankruptcy

Sure, I am a bankruptcy lawyer, why would I not be We all should be, not just us insolvency professionals.. Why Thankful for Bankruptcy? Because, in short, bankruptcy is good for the economy. Because, starting over is a good thing to be able to do when a business fails. Or a consumer. Walt Disney isContinue Reading

Home Bankruptcy Exemption In Michigan

If you file bankruptcy, you want to know if you can keep your home.  You want to know, what is the home bankruptcy exemption? Home Bankruptcy State Exemptions In Michigan Michigan has home exemption choices for folks who file bankruptcy here. Tenancy by entireties is available as one option. That is a fancy legal termContinue Reading

What Is Mortgage Arrearage?

Mortgage arrearage is the amount you are behind in your mortgage payments.  Not behind like in the picture, Behind as in missed payments, plus late fees, plus, well, some other things. Mortgage Arrearage Interest accrues on the unpaid balance of a loan, so if you cannot make your mortgage payment, the balance goes up, notContinue Reading