Dealing with debt can be scary. Especially when debt collectors start calling about old debts you thought were long gone. These debts are sometimes called “zombie debts” because they come back from the dead to haunt you. As a financial services company, we want to help explain what zombie debt is, your rights, and what to do if collectors contact you.

What is Zombie Debt?

Zombie debt is debt that you thought was paid off or too old to be collected, but suddenly comes back from the “dead.” This often happens when the original creditor sells or transfers the debt to a collection agency. The debt is “reanimated” because the collector tries to get you to pay, even though you thought it was gone.

Some common examples of zombie debt:

• Old credit card balances you thought you paid
• Medical bills that went to collections years ago
• Accounts you closed and forgot about
• Debts discharged in bankruptcy

Zombie debt usually arises when the original creditor stops trying to collect. They may sell the debt to a collection agency for pennies on the dollar. The collector then tries to collect the full amount from you. Even though the creditor wrote it off.

Your Rights With Zombie Debt

You have rights when it comes to zombie debt collectors. Here are some key things to know:

• Debt has a statute of limitations – collectors can’t sue after a period of time (varies by state)
• Collectors must provide written notice of the debt within 5 days of first contacting you
• Collectors can’t harass or threaten you, or call before 8am/after 9pm
• You can request debt validation – collectors must prove the debt is yours
• You can dispute incorrect or fraudulent debts
• Collectors can’t talk to others about your debt without permission

The Fair Debt Collection Practices Act and state laws protect you from abuse. Collectors who break the rules can be fined or sued.

What To Do About Zombie Debt

If a collector contacts you about a zombie debt, stay calm. Take notes and don’t ignore it. Here are some tips:

• Ask for written notice of the debt – get details in writing
• Look up the statute of limitations – don’t pay if it expired
• Dispute incorrect debts – challenge wrong amounts or fraud
• Negotiate – offer less than the full amount if you can pay
• Get collector agreements in writing – document payment plans

You may be able to get debts removed from your credit report if they are obsolete or unverified. Dispute errors or outdated debts with the credit bureaus.

If you are sued over zombie debt, be sure to respond within the required timeframe. Get help understanding your rights and options. Legal aid organizations may provide assistance.

Debt settlement companies can also negotiate and settle zombie debt on your behalf. But beware of scams and high fees.

Protect Yourself From Zombie Debt

Here are some tips to avoid zombie debt problems down the road:

• Review credit reports annually and dispute errors
• Save account records and correspondence about debts
• Pay medical bills promptly or set up payment plans
• Notify creditors if you move or change contact info
• Consider debt consolidation loans to simplify payments

Act quickly if financial hardship makes paying difficult. Ask about hardship programs or reduced settlements. Bankruptcy is a last resort option if you have no other way to deal with overwhelming debt.

Dealing with zombie debt can be alarming and stressful. But knowledge is power when it comes to your rights. Don’t hesitate to seek help negotiating or validating questionable debts. With the right information and support, you can defend yourself from unfair collection practices. And take back control of your financial future.