Zombie debt is debt that 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 these “zombie 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.