You probably never really believed in the zombie apocalypse, but it was fun to watch TV shows depicting what it would be like if the dead walked the earth. Needless to say, it is much less entertaining when old debts come back into your life. When you receive a letter or phone call from a creditor or collector reminding you of a debt from your past, you may wonder how best to react.
What you may not realize is that debt has a statute of limitations. After a certain amount of time has passed, typically four years in California, the debt expires and the creditor forfeits the right to file a lawsuit to claim it. However, that does not stop some creditors or collectors from trying to trick you into resurrecting the debt and forcing you to pay it.
Understanding zombie debt
When you receive a call asking for payment for an old debt or a debt you can't remember owing, it is common to feel flustered and confused. Many make the mistake of agreeing to make a payment immediately, which can have terrible consequences. If you send even a single dollar to pay on an expired debt, you reset that debt's statute of limitations, which means your creditor may now file a lawsuit against you if you do not pay the full amount. Zombie debts can come from several sources, including:
- Discharged debts from a previous bankruptcy
- Debts you still owe but forgot to pay
- Charges someone else made after stealing your identity
- Debts a creditor already settled with you
Sometimes creditors will sell old debts to collectors who will employ strong tactics to persuade people like you to send them a payment. In this way, they can revive the debt and perhaps obtain the full amount.
What can you do?
Anytime a creditor calls you about a debt you are uncertain you owe, you have the right to ask for more information. It is wise to refuse to agree to make any payments until you receive a debt validation letter, which will contain details about the origin and history of the debt. This will help you determine if the debt is expired or if it may be something you need to address.
In either case, bringing your situation to the attention of an attorney can help you explore your options for dealing with debt. A skilled attorney can advocate for you with your creditors and guide you in the most appropriate way to bring your finances under control.