Despite sounding like the title of a new Halloween movie, zombie debt has nothing to do with the undead. Instead, the concept gets its name from forgotten debts, rising from the graveyard, and coming back to haunt people.

It might sound scary because it is, especially if your debts are high and your income doesn’t seem to match up.

What is Zombie Debt?

Zombie debt is the term given to old debt that is no longer on your credit report. Usually, this debt is more than three years old. There are a few reasons why debt becomes zombie debt, and it gets forgotten or written off.

However, after a while, it can resurface from the ‘debt grave,’ and the debt collector begins to knock on the door (or send you several letters and emails) once again.

The original creditor of the loan usually stops harassing you for repayment after a while. They give up and sell the debt to a debt collection company. It’s the debt collectors that end up harassing you further down the line in an attempt to make you pay back what you owe.

Paying Zombie Debt That Isn’t Yours

It’s important to remember that the debt collector can sometimes try and collect money from you that you don’t actually owe. In other words, they try to collect a debt from your bank account that isn’t yours to pay.

You need to double-check that the debt is yours before sending any money to the debt collector. If you end up overpaying and covering debt that isn’t yours to pay, it will be much harder to get it back later.

This might sound bizarre, and you’re probably wondering how anybody could end up paying off debts that aren’t theirs, but thousands of people do precisely this every single year. The debt collectors know that most people don’t keep track of their debts and pay any debt bill that comes through, and they take advantage of this.

What is Classified as Zombie Debt?

There are a few different causes of zombie debt, including:

  • Old debts
  • Status of limitations
  • Settled debts
  • Debts that aren’t yours

Old Debts

These are the debts that have expired and have fallen off your credit report. Despite disappearing from your credit report, the debt collectors can still see that the debt has not been repaid, and they will still come to harass you for it.

Statute of Limitations

Debts have an expiration date, so they are mute after a certain period. Generally, this period is between three and six years but can be shorter in some states.

Debt collectors cannot sue you after this period, but that doesn’t mean they won’t continue to harass you for repayments. As long as a couple of people pay off their debts, the debt collectors can make a profit, and they’re happy.

If you are getting endless phone calls and emails from the debt collectors asking you to repay the debt that has gone past its statute of limitations, do not repay it. If you pay even a small percentage of your debt back, you will restart the statute of limitations, and the debt will return to your credit report. At this point, the debt collector is in their legal right to sue you for not paying back your debt.

Settled Debts

If you and the original creditor have agreed to bury the debt in the ‘debt graveyard’ and let it expire, these settled debts become zombie debts.

As long as you and your creditor have signed a legally-binding contract agreeing to dismiss the debt, it won’t code back to haunt you, and you will never have to repay it.

Debts That Aren’t Yours

When you’re called to pay debts that aren’t yours, it indicates that identity theft has occurred. This is why it is so essential to perform some deep research if and when you receive a call or email from the debt collectors. You might find that the debt you are being asked to repay isn’t yours and, in this case, you are not obliged to pay it back.

Don’t let the debt collectors intimidate you into paying any debt that is not yours. You are not responsible for paying back money that you didn’t borrow in the first place.

How to Keep Yourself Safe From Zombie Debt Collectors

Here are a few top tips to protect yourself from debt collectors when they are harassing you for zombie debt repayments. 

  • Keep a check on your credit report so that you know what money you owe, who you owe this money to, and which debts have already been paid off or settled.
  • Research your rights so that the debt collectors can’t blind you with jargon or threaten you into paying off debts that you don’t owe.
  • Avoid getting into debt in the first place. Try not to spend money that you don’t have and prevent yourself from needing to borrow money at all.