What is Zombie Debt, and How Do You Get Rid of It?


If you’ve ever been sent to collections over an unpaid debt, then you know what a hassle this process can be. Collection agencies are often aggressive and resort to harassing phone calls and manipulative debt collection tactics.

In most circumstances, you can work something out with your creditors, deal with the delinquency, and move on. But what if you’ve dealt with your delinquency and your creditors are not moving on?

Then you’re dealing with a problem commonly referred to as zombie debt.

What is zombie debt?

Zombie debt is any debt that has long been erased from your credit report yet debt collectors still keep trying to collect on it. It could be that the debt is past the statute of limitations, it’s already been paid off, or it may not even be yours.

The original creditor is likely done with it and has moved on. But just when you think it isn’t an issue anymore, the debt is bought by another debt collection agency. Then you start receiving the harassing phone calls and letters all over again.

Not only is zombie debt frustrating, but you continue to suffer financially for a mistake that you’ve either already dealt with or were never responsible for in the first place. Even if a debt collection agency cannot legally collect on the debt, it can still show up on your credit report and hurt your credit score.

Common Case of Zombie Debt

Let’s look at some common cases of zombie debt:

  • Time-barred debt that is past the statute of limitations: If you default on a loan, the debt collector has a certain length of time that they can collect on that debt and take you to court. Once you’re past the statute of limitations, you’re no longer liable for the debt. However, debt collectors will often purchase the old debt and try to collect it anyway.
  • Debt that was discharged in bankruptcy: Sometimes, debt collection agencies will try to revive debt that has been dealt with and discharged through bankruptcy.
  • Debt that isn’t yours: If you’ve been the victim of identity theft, then a debt collector may be harassing you about debt that isn’t even yours. This is the most frustrating kind of zombie debt since you never did anything wrong.

What kind of tactics do debt collectors use?

A debt collector’s only goal is to convince you to make a payment on the debt they claim you owe. And many debt collectors are willing to resort to questionable or even illegal practices to get you to pay up.

That’s because the minute you make a payment on the debt, it gives the debt collector an opening to sue you for the remaining balance. If the debt is beyond the statute of limitations, even a small payment resets the clock entirely.

Knowing some of the common tactics that a debt collection agency uses is the best way to know how to handle them. Here are a few examples to watch out for:

  • Threaten to sue you: Many debt collectors will threaten to take you to court, even if they can’t legally collect on the debt and are not allowed to sue you. The goal is simply to scare you into making a payment.
  • Verbally harass you: According to the Fair Debt Collection Practices Act, debt collectors are not allowed to harass borrowers. But unfortunately, many debt collectors do it anyway.
  • Try to get information out of you: Debt collectors will try to learn anything about you that they can so they can use the information against you.
  • Lie to you: Many debt collectors will promise to stop bothering you if you make a payment. They may also promise to remove negative items from your credit report in exchange for a payment. This is usually just a manipulation tactic to get you to make a payment.

See also: How to Deal with Debt Collectors

How to Get Rid of Zombie Debt for Good

If you’re constantly being contacted about zombie debt, it may feel like there is no end in sight. Let’s look at a few ways you can finally kill that zombie debt for good.

1. Monitor your credit score

Information is your best defense against debt collectors who will lie to you to get you to make a payment. Make sure you monitor your credit report closely and watch out for any new items affecting your credit score. And if a debt collection agency is trying to drag up a debt you’ve already paid, look for any receipts and bank statements that verify that fact.

2. Don’t let a debt collector pressure you into making a payment

People often feel embarrassed by their old debt, which gives a debt collector an opening to manipulate you into paying. But you shouldn’t make any payments until you have more information.

The minute you make even a small payment, it becomes much harder for you to get rid of that zombie debt. If you’re past the statute of limitations, making a payment resets the clock on that debt.

If the debt isn’t yours, it becomes much harder to prove that fact if you’ve made a payment. So no matter how much a debt collector tries to pressure you or embarrass you, refuse to make even a small payment on the debt.

3. Ask the creditor to verify the debt

Send the debt collector a debt validation letter. This is a letter requesting that a debt collector proves you owe the debt and that they have a right to collect on that debt.

If the debt collector is unable to validate the debt, then they cannot legally try to collect on it. And if they’re unable to validate the debt, they must remove the item from your credit report. 

4. Seek out additional help

And finally, if this problem doesn’t seem to be getting any better then it may be time to seek out the help of an attorney. Stop communicating with the debt collector. You don’t have to respond to them. An attorney will inform you about what your rights are and what the best course of action is.

Bottom Line

Zombie debt can be challenging to deal with and it may feel like a problem that will never go away. But by being aware of some of the common tactics debt collectors use and seeking help from an attorney, you’ll be prepared to deal with them. And once you’ve resolved the debt for good, you can begin taking steps to repair your credit and build a better financial future.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about a variety of personal finance topics including student loans, credit cards, investing, building credit, and more.