How to Stop Debt Collectors From Calling About Old Debts
Have you ever heard of “zombie debt?” No, it’s not a new horror flick – it’s a real phenomenon. And it’s an increasing problem for indebted Americans.
In recent years, sketchy debt collection agencies have begun buying up old debts for pennies on the dollar, and then hounding consumers relentlessly until they pay up. Essentially, they’re bringing back old debts from the grave.
Because debt collection agents stand to gain so much profit from these dirt-cheap debts, they’ll do just about anything to get consumers to cough up the money. Common scare tactics include bullying, verbal abuse and threats of wage garnishment, lawsuits and even jail time.
This can be understandably surprising and intimidating for consumers, especially when they had assumed they were no longer liable for their past debts – and in many cases, they’re right.
Once a debt passes your state’s statute of limitations (for instance, 10 years in Illinois) creditors can no longer sue you to collect on it. That’s right: In most cases, debt collectors have no legal right to collect on old debts.
If a debt collector is harassing you, ask for written validation of the debt. If the agent can’t produce it, they must legally leave you alone. A good attorney can help you understand the status of your old debts. Whatever you do, don’t make payments on old debts without consulting a professional, as paying any amount will reset the statute of limitations, freeing up the collector to sue for the entire debt!
In some instances, the zombie debt may not even be yours. It could belong to someone else with the same name or be the result of identity theft or creditor error. Or perhaps it once belonged to you, but was wiped from your credit record or discharged in bankruptcy.
Even if your debt does turn out to be collectable, you don’t have to put up with harassment from debt collection companies. Badgering and lying are violations of the Fair Debt Collection Practices Act, and telling collectors so should send them packing. But if not, enlisting the help of an attorney familiar with your state’s statute of limitations, such as a bankruptcy lawyer, should give you the upper hand.
Of course, the best solution to zombie debt is to avoid it altogether. If you have more debt than you can repay on your own, bankruptcy can offer a realistic resolution. Not only will the right bankruptcy plan help you pay down or completely eliminate existing debts, but – by freeing up money and rebuilding credit – it can also keep you from accumulating new debts.
With an effective bankruptcy plan and a knowledgeable bankruptcy attorney, you can put old debts to rest – for good.
Wondering if bankruptcy could be the answer to your financial dilemma? Contact DebtStoppers to sign up for a complimentary one-on-one debt analysis with an expert bankruptcy lawyer today.
What to Do When the Debt Collector Calls, by Steve Bucci, Bankrate.com