If you’re considering bankruptcy, you’re likely facing overwhelming debt. If you’re being inundated by collection calls and notices, it’s understandable that you may have lost track of who you owe and how much.
It’s possible that some of these are even “zombie debts.” You may no longer owe the money or possibly never owed it in the first place. Zombie debts include the following:
- Debts already paid off or settled for a lower amount with the creditor
- Debts that are past the statute of limitations for collection (which is usually six years)
- Debts that belong to someone else
There could also be errors that were never noticed, like a duplicate charge or a payment that was made but never correctly posted to the account.
How does zombie debt happen?
Over the years, a debt can go through multiple collection agencies. A new collector may not realize that a debt handed over to them has already been resolved.
Sometimes, it’s not an honest error, but a dishonest collector that is the problem. So-called “debt scavengers” will continue their collection efforts even if they’re aware that a debt has already been resolved or is past its statute of limitations.
Don’t turn a zombie debt into a real one
In some cases, people inadvertently “reanimate” a zombie debt. If someone makes a payment on a debt that is past the statute of limitations, that resets the clock on it. That means it again becomes a debt that is owed.
This is why it’s crucial to get a clear picture of all of your debt before you file for bankruptcy. This is understandably something that’s unpleasant to do. However, it’s necessary in order to find the best solution for getting out from under debt and creating a healthier financial future. Getting sound legal guidance as early as possible is a good first step.
