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Health & Fitness

Coping with "zombie debt"

Don't let "zombie debt" give you nightmares

Local credit counselors report a spike in inquiries about a kind of debt you may not have heard of: zombie debt.  As the name suggests, zombie debt is old debt that has come back from the dead to haunt you.  In some cases, collectors have been reported to come after consumers claiming they owe bills from decades ago and threating to sue.  To help you understand zombie debt, you should know that old debts are often sold from one creditor to the next for pennies on the dollar.  In an attempt to recover money, some collectors will contact you long after you have forgotten about the bill.  Should you face this situation, the  certified credit counselors at non-profit ClearPoint Credit Counseling Solutions offer these tips:

  • The statue of limitations on credit card debt in Missouri and Illinois is 5 years, which is the amount of time the debt can legally be collected.
  • You have the right to receive proof of the debt within 35 days of being notified by a collection agency of their intent to collect. 
  • Even though the statue of limitations is 5 years, the debt will show on the credit report for 7 years. 
  • Engaging the creditor can reset the statute of limitations, so it is important to gather facts before making payment or even a promise to pay. 
  • A “cease a desist” letter will stop the creditor from contacting you and a credit bureau dispute will remove any items older than 7 years. 
  • If you are sued for a zombie debt it is critically important to appear in court armed with proof of the age of the debt, or you may be held liable. 
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