Consumers generally not responsible for 'zombie' debts - 3TV | CBS 5

Consumers need to beware of zombie attacks. Not the walking dead, but dead debt that comes back to life. Most times you don't owe a cent, even if the debt is real.

What do you do when a rogue debt collector sends you a letter demanding payment on a really old debt? It happened to Debi Rockey.

"This was an attempt to collect a debt and I owed Arrowhead Hospital $300," Rockey said.

Rockey remembers her brief hospital stay and says she paid that debt in full back in 2002. But now, it's come back to life, it's a &;zombie' debt, and the collection agency wants her to pay again.

"You've got to be kidding. This was like thirteen and a half years ago, how am I going to prove to them that I paid this," Rockey said.

Rockey called the collector asking who has records from 2001 laying around. She says the collector didn't care how long ago it was, it was her responsibility to prove that she paid it.

"I was talking to my dad and I said I think I'm going to contact Dave Cherry and see what he says about that," Rockey said.

Rockey doesn't have to prove anything. Arizona Revised Statute 12-548 sets a six-year limitation on debts. Meaning if a debt has not been collected within six years of first default, the consumer is under no obligation to pay, even if the debt is real.

But some people decide not to fight zombie debts. They figure the amount of money isn't worth the effort. That's a bad idea, know your rights instead.

"If it's over six years old, then you don' have to worry about it, it's just too old, they've wasted their opportunity," Rockey said.

Arizona Revised Statute 12-548 does not apply if a judgment or lawsuit was filed against you; in those cases the debt remains valid indefinitely.

But with contract debt, including credit cards, if creditors don't get you to pay within six years of when the debt first goes into default, they have the right to keep asking, but you are under no obligation to pay.

In this case, the collector cannot make a negative notation on your credit report; it is not legal. If they do anyway, file a dispute with the credit bureau and it should be removed right away.

Copyright 2014 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.


zombie debt letter

“Zombie Debt” is debt that you cannot be sued for because the statute of limitations has run. It’s called Zombie Debt because it should be dead, but unscrupulous debt buyers keep bringing it back to life.

How does this happen? Often, a “debt buyer” purchases debts from another company and then works to collect it using phone calls and letters. Often, these debts are purchased, sold, and resold many times. The lack of information that these debt buyers and collectors have about these debts is alarming. In a 2009 study, the FTC showed concern that debt collectors, including debt buyers, may have insufficient or inaccurate information when they are working to collect on debts. This can result in debt collectors trying to recover from the wrong person, or recover the wrong amount, and/or filing a lawsuit past the statute of limitations.

What happens? The less reputable debt buyers and collectors use intimidation, harassment, deception, or other abusive tactics to get their victims to pay or make payments on the debt. Because the debt buyers have literally bought the debt for pennies on the dollar, any collection on the debt generally amounts to a huge windfall for the debt buyer. Worse yet, some of these debt collectors will receive large payments on a debt from an individual, then sell the same debt to another debt buyer, resulting in a new round of collection tactics by another company for the same debt amount or higher. In the worst cases, some debt buyers will file lawsuits because they realize many people do not know there are consumer protections against zombie debt collection. When a lawsuit is filed, the court only has the information supplied by the debt buyer filing the lawsuit. If the individual being sued does not respond to the lawsuit, or does not respond with a recognized defense, then the debt buyer will seek a default judgement and garnish wages.

What are my rights? Consumer protections provided by the West Virginia Consumer Credit & Protection Act and the Fair Debt Collection Practices Act make it unlawful for debt buyers to file lawsuits for Zombie Debt. Additionally, in West Virginia, every debt collector is required to provide notice if they are trying to collect a zombie debt. Unfortunately, some debt buyers still try to collect zombie debts because they don’t follow the rules. These debt buyers won’t provide the required notices either because they don’t do their homework on the history of an old debt, or because they are willingly breaking the rules because they believe the person they’re going after will not seek legal assistance.

At Skinner Law Firm, we represent clients who have been unlawfully contacted by debt collectors. If you believe you have been subjected to unlawful collection tactics, then contact us for a no cost consultation. We can stop a lawsuit in its tracks and even obtain money for our client when the debt collector has broken the rules.

Stephen Skinner is the lead attorney for Zombie Debt cases.

Zombie debt letter

Since 1969, Skinner Law Firm has been dedicated to helping people with wrongful death, injuries, insurance issues and consumer fraud.


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