Whether you go through Chapter 7 or Chapter 13 bankruptcy, most types of debts are discharged at the end of your case. It should be the last you hear of them. Unfortunately, some unscrupulous debt collectors may try to resurrect them. Creditors sell unresolved debts to collection agencies for pennies on the dollar. Some of these collectors may use unethical and illegal methods to get unsuspecting people to pay old debts when they are not obligated to do so. Their tactics are so intimidating they can trick flustered individuals into agreeing to pay a debt that is not even their own. If debt collectors are harassing you, seek help from experienced bankruptcy professionals like those at Sawin & Shea.

What Are Zombie Debts?

Zombie debts are old balances or bills that have either been discharged in bankruptcy or are outside the staute of limitations for collection by filing a lawsuit. A creditor sells them to a collection agency to recoup their losses. The agencies buying the old debt are called debt scavengers. Debt scavengers use questionable tactics to scare people into paying outdated balances.

What are Some of the Methods Used by Debt Scavengers?

• Make False Promises – They insinuate if you pay a portion of the debt, they will leave you alone. By giving even a small amount, it resets the statute of limitation on the debt. Now, they can come after you for the full amount.
• Threaten Legal Action – If a debt is past its statute of limitation, you cannot get sued for not paying it. Debt scavengers try to scare you by threatening bogus lawsuits.
• Attempt to Re-Age Debts on Credit Reports – Debt scavengers will report old debts as new ones, causing them to re-appear on your credit report as current debt.
• Use Verbal Abuse – Many debt scavengers use offensive language to harass you into paying. It is a violation of the Federal Fair Debt Collections Practices Act (FDCPA).
• Claim They are Lawyers – When debt scavengers call, they claim to be part of a litigation firm preparing to sue over the debt. They will usually ask for a partial payment to delay the action.

Can a Discharged Debt Be Put Back on a Credit Report?

The debt remains on your credit report for seven years plus 180 days from the date of delinquency. After that, it is removed. A collector may threaten to put it back on your credit report, but they cannot legally do this. However, if you pay even a portion of the debt, it renews the statute of limitation, and it may become a new debt on your report.

What if the Debt is Not Mine?

Debt scavengers will often go after a debtor’s family and friends to get paid. Collectors convince them they are helping you by paying the debt. Sometimes they will even advise family members that criminal charges against you are imminent. This would be a violation or the Fair Debt Collection Practices Act and it is possible for an experienced attorney to sue on your behalf.

How Can I Protect Myself from Debt Scavengers?

• Don’t Talk to Them – Just hang up. Request that all communications come through the mail.
• Request Validation – Request a certified letter listing the company that authorized the agency to collect it and the amount you owe on the debt.
• Don’t Revive the Debt – Debt scavengers often record calls, so don’t admit to owing the debt or agree to make any payments.
• Know Your Rights – Review the FDCPA and understand how it protects you.
• Send a Letter – Request that the collection agency stop calling you in a certified letter.
• Review Your Credit Report – Check it frequently to see if any zombie debts are reported.
• Research the Company – If you do talk to them, write down the company name, address and contact information. Check their record for complaints.
• Respond to Lawsuits – If you receive a summons, do not ignore it. You have a limited time to respond. If you do not reply, you will forfeit your right to fight the lawsuit. Talk to a bankruptcy lawyer promptly.
• Talk to an attorney experienced in debt.

Sawin & Shea – Indianapolis Bankruptcy and Consumer Protection Attorneys

Collection agencies do not always play fair. Protect yourself from debt scavengers who want to trick you into reviving old debts. If you need help stopping the harassing calls, turn to the Indiana bankruptcy attorneys at Sawin & Shea. With years of experience representing good people in bad financial situations, we know how to stop collectors from taking advantage of you. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.