Some creditors report old debts because they know that a collection account on your credit report can force you to pay. Fortunately, another federal law, the Federal Credit Reporting Act (FCRA), provides a dispute resolution procedure for consumers. If the original account is outside the seven-year period, you can dispute the registration and have it removed from your credit report. If an account is removed from your credit report, it will also be removed from your credit score calculation. Debt collectors, also known as zombie money collectors, are adept at making you anxious and often try to trick you into paying off debt you don`t owe. Here are some of the strategies they could employ: The bureau acknowledged the difficulty of the issue in its proposal of more than 500 pages. Some smaller debt collection companies told the CFPB that “determining whether the statute of limitations has expired can be complex,” according to the proposal. The tactics used by debt collectors are not always legal either. Here are some of their favorite tips: You see, these debt collectors are really good at their jobs, and when they see an old debt being revived (no matter how old it is or who owes it), they want that money.
And they will do their best to get it from you. If a debt collector contacts you about a debt that has expired, has already been paid, or does not belong to you, you are not legally responsible for the repayment. If you don`t know if the debt is yours or if it`s expired, ask the debt collector for the age of the debt or do your own research. Dispute the debt with the credit reporting agencies or creditor if you find that a mistake has been made. If a debt is time-barred, zombie debt collectors can`t sue you legally. Even if they could threaten to sue you, it is doubtful that they have a good record. According to the FDCPA, debt collectors cannot threaten to sue you for a debt they know is time-barred. Because debt collectors and debt collectors don`t always act in good faith, it`s important to learn how to recognize zombie debts and understand how collection attempts work.
Innocent mistakes can put you back on debts that had already expired. Texas and Washington state passed legislation this year that makes it harder to revive debt beyond the statute of limitations, but the industry has successfully fought efforts in other states, including New York. And consumer advocates are concerned that the new rules proposed by the Consumer Financial Protection Bureau — the first major update to the Fair Debt Collection Practices Act in more than 40 years — will further strengthen the industry. It shouldn`t surprise you that zombie debt collectors don`t play fair. Think of it this way: you have a job – chasing people with debts and getting money from them. There you go. And they will go to great lengths (lies and threats) to make sure they get the job done. You can also try sending a cease and desist letter to the collection agency if they are harassing you because of a zombie guilt that is not yours. If they persist, you can file a complaint with the FTC or the Attorney General`s Office. If they sue you, don`t be afraid. You need to respond quickly to collection claims with SoloSuit. Beware: even a single payment for an old debt can bring them back from the dead.
It doesn`t require you to make payments for zombie debt. However, debt collectors may try to convince you to pay them a small amount of debt. Under the Fair Debt Practices Act, you can demand that they leave you alone without having to pay anything (FDCPA). You must stop contacting you if you tell them in writing that you no longer wish to be contacted. Creditors may also violate the FDCPA, which does not specifically address the age of debt. For example, it`s a violation of: The short answer is that debt buyers accumulate a lot of “uncollectible” debt. In most states, debt collection agencies can pursue many collection efforts, even if the debt is outside the statute of limitations. In fact, these creditors can always sue you. It is up to you to increase the limitation period and dismiss the appeal. Many people prosecuted by debt collectors do not appear in court. Thus, creditors can sometimes obtain default judgments even if the debts are imprescriptible.
Some States make it illegal to file an action for debt collection outside the statute of limitations. “There are 50 state legislatures that have different laws,” said Richard J. Perr, an attorney representing debt collectors at the Philadelphia law firm Fineman Krekstein & Harris. “Whether it`s your electric bill, your water service, or a Verizon or AT&T cell phone bill to your local doctor, they can all be treated differently.” If a debt buyer tries to negotiate by saying they won`t report the account to the credit bureaus, you know what that really means. First, if the debt has been inactive for more than seven years, the buyer of the debt cannot report it to the credit bureaus. The seven-year period is based on your actions on the account. It doesn`t happen again because a new creditor bought the account. The Federal Trade Commission described zombie debt as “a debt that you think is dead, gone and forgotten, but has somehow been brought back to life.” Debt is received by debt collectors who purchase old debts from original creditors and/or collection agencies for minimal effort with the intention of guaranteeing the funds owed, even if it is only a portion of the original debt. (Note: The link above to the FTC page is an archived version. Updated information can be found on the following Nolo page Debt Sensor and Zombie Debt) As I said, you`d be surprised how often debt collectors manage to collect zombie debts.
This is because there are different types of zombie debt, and be aware that it can help protect you when collectors come to you. If the debt is listed on your credit report, dispute it directly with the three major credit bureaus: TransUnion, Experian, and Equifax. Raymer, the Oklahoma social worker, has struggled with her old debts for years. After a divorce, she ended up with a bill totaling more than $13,000 from a Target credit card. After she defaulted, the account was turned over to Wisconsin-based law firm Rausch Sturm, which acts as a debt collector. If they have no chance of collecting, they can sell the debt to another debt buyer. Some debts change hands several times. This means you can receive calls and pickup notifications from one unknown company at a time. The New York State Department of Financial Services recently sent subpoenas to six debt collection agencies after receiving a “substantial” number of complaints, some of which involved debts beyond the statute of limitations period where claims for payment could not be legally enforced, according to a person familiar with the cases but not authorized to speak about it publicly. If you have filed for Chapter 7 bankruptcy, some of your debts may be settled, which means you are no longer responsible for paying them off.
In the case of a paid debt, you should have a written agreement stating that you are no longer legally responsible for the debt. The company dropped its lawsuit. But in July 2018, Rausch Sturm filed a lawsuit again. She said in court filings that Raymer made a payment in January 2016, garnishing 19 cents, which allowed the company to pursue the debt. Creditors regularly remove old debts from their books and sell them to third-party debt collectors on a dollar-per-dollar basis. But when debt is sold and resold, the information can expire, forcing debt collectors to demand payment of a defaulting debt. You probably think there`s no way I`m paying for a debt that`s not mine. But you`d be surprised how often this tactic really works. In fact, 49% of consumer complaints to the Consumer Financial Protection Bureau involve debt collectors trying to collect debts that are not owed by the consumer.1 However, if the zombie debt is yours and it is still on your credit report, consider paying it off or making an agreement with the original creditor or debt collector to pay less than that. which is due. If the blame is not yours or is not valid, you should take similar action. Ask the debt collector to send a confirmation of the debt.
If they continue to contact you, you can send a letter asking you to stop. Zombie debt collectors or debt hunters know how to worry you and often try to make you pay for a debt you don`t owe. Here are some common tactics they can try: Efforts to collect old debts often aim to get consumers to reset the statute of limitations through a variety of means, including sending them credit cards to pay off old debts, or allowing them to make a small payment to stop collection calls. That effort has contributed to the flood of debt collection lawsuits clogging courts across the country, according to consumer advocates. In New York, the number of debt collection lawsuits topped 100,000 last year, up from 47,000 in 2016, according to data from the New Economy Project, an advocacy group.