In the collection industry, Zombie Debt is an industry term used for debt which has gone out of statute or is time-barred by the statute of limitations.
In most states the statute of limitations is six (6) years.
This means that this debt is essentially unenforceable and barred from being enforced. Although many collection agencies know this, they still try and collect this debt, because, in many states, if you make just one payment on a time-barred debt you bring it back to life. Thats right, debt that was unenforceable becomes enforceable and the "statute of limitations clock" starts ticking as if it were day one. This is Zombie Debt.
One would assume that this is illegal…it sounds wrong - collecting on a debt which is no longer enforceable for the purpose of trying to trick you into making a payment that brings the debt back to life.
At The Prado Law Firm we are seeing an increase in the attempt to collect Zombie Debt. Many emboldened debt collectors have begun to attempt collecting on time barred debt. (Note: a statute of limitations defense in most cases will dismiss the case).
So what should you do if a debt collector is trying to reanimate your zombie debt? Call us - we can help. At The Prado Law Firm we fight violations of the Fair Debt Collection Practices Act.
Collecting on zombie debt may violate the Fair Debt Collection Practices Act. If debt collectors are violating your rights you may be entitled to statutory money damages.
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