Haunted by an Old Credit Card Bill? How to Deal With Zombie Debt


When a credit card bill goes unpaid, it doesn’t just go away. Even if your card issuer ends up writing off the debt, they could still sell your account to an outside debt collector. The debt collector may try to collect on what’s owed or they may decide to sell the debt to another collection agency. In the meantime, you’ve forgotten all about the debt until a bill shows up in your mailbox months or in some cases, years later. These types of accounts are often referred to as “zombie debt” and if you’ve been contacted about a credit card bill you’re not sure you owe, it’s important to know what your rights are.

What’s Zombie Debt?

Zombie Debt is a credit card bill or other debt that’s past the statute of limitations. The statute of limitations establishes the guidelines for how long a creditor or collection agency has to sue you for an unpaid debt. When the statute of limitations expires, you technically still owe the debt but you’re no longer subject to legal action. Each state has different guidelines on how long a creditor can sue for specific types of debt.

When a debt collector buys an old debt, their primary goal is usually to pressure you into paying up. Typically, they buy the debt for pennies on the dollar so the more they can get you to pay, the more profit they end up making. Some of the tactics that zombie debt collectors may use include harassing you, threatening you with legal action or attempting to trick you into restarting the statute of limitations. If the statute of limitations hasn’t expired, you can inadvertently restart the clock by acknowledging that you owe the debt, making a payment or agreeing to a payment plan. This gives the debt collector more time to seek a judgment, which can lead to wage garnishment or a bank account levy.

Validating the Debt

If you’re contacted by a debt collector about a credit card account that you either don’t think you owe or you believe is outside the statute of limitations, you should immediately ask them to validate the debt. Under the Fair Debt Collection Practices Act, debt collectors are required to provide you written proof that they have legal standing to collect a debt and that the debt is still within the statute of limitations. They must provide proof within 30 days of receiving your request and during that time, all debt collection actions must cease. During this time, you can do your own research to determine whether the debt belongs to you and whether or not it’s time-barred by the statute of limitations.

If You’re Sued

Even when a debt is time-barred, it may not be enough to prevent a debt collector from taking you to court anyway in the hopes that you won’t appear to defend yourself. When a debtor is sued and doesn’t show up in court, the creditor automatically wins a default judgment. If the debt collector fails to serve you with proper notice of the lawsuit, you may not even know there’s a judgment against you until your wages are garnished or your bank account is frozen. If you’re sued by a debt collector after asking for validation of a zombie debt, it’s vital that you appear in court. You should bring along copies of any written communications you’ve had with the debt collector as well as any evidence you have to support your claim that the debt is time-barred. If you can prove that the debt collector sued you or violated your rights in any way, you may be able to file a counterclaim for damages. Even if you don’t sue, you can potentially prevent further instances of abuse by reporting the debt collector to the Federal Trade Commission.

Final Word

It’s a good idea to review your credit report regularly to make sure that all of your accounts are being reported accurately. If you find inaccurate or erroneous information, you can initiate a dispute with the credit reporting bureau. The best way to deal with zombie debt is to understand what your rights are and how to exercise them effectively.

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