Sometimes, old debts can simply seem to fade away. Perhaps they’ve been written off by the creditor as impossible to collect, or perhaps they are simply forgotten. However, unscrupulous debt collectors can sometimes bring those old debts “back from the dead.”
It’s called zombie debt, and it can make a significant difference in your quality of life and your financial future. And here in South Carolina, we have one of the highest rates of medical debt in collections in the country, so this is a severe and persistent problem.
When dealing with debt collectors, make sure you know your rights
That’s why, if you’re being hassled by debt collectors, you need to know your legal rights and options. Just because you get a call or a letter from a debt collector doesn’t mean you have to pay. Take a breath, find out what’s going on, and get legal advice from an experienced bankruptcy attorney.
What is “zombie debt?”
Generally speaking, zombie debt is debt that is time-barred and cannot be collected. In South Carolina, the statute of limitations for most types of unsecured debt is three years; if more than three years have gone by since you’ve last made a payment or acknowledged responsibility for the debt, it’s too late for the creditor to collect.
However, zombie debt can also refer to debts that are already paid off, belong to someone else, or don’t exist at all – but for one reason or another, a debt collector tries to collect anyway. For them, it’s a numbers game: they buy those uncollectible debts for a tiny fraction of the balance, and if even a few debtors pay up, that’s enough for them to make a profit.
Debt collectors that pick up these dubious debts often use equally dubious collection tactics, such as making threatening or harassing phone calls. They may threaten to have your wages garnished or claim you’re facing legal action if you don’t pay. Again, if it’s zombie debt, they don’t have the power to do that, but they’re trying to intimidate you into paying anyway.
What to do if you’re contacted about zombie debt
Remember, this is general information, not legal advice. If you are facing debt collection action, it’s best to get advice from an experienced attorney on your specific situation. However, here are some general tips:
- Don’t acknowledge ownership of the debt. If you acknowledge an old debt, or make a payment on the debt, the statute of limitations restarts. In any communications with a debt collector, it’s best to explicitly say something like “I do not acknowledge responsibility for this debt.”
- Get the debt collector off the phone. The longer you stay on the phone with a debt collector, the more opportunities they have to intimidate or mislead you. Ask for their mailing address, then hang up and communicate with them by certified mail.
- If you get sued, don’t ignore it. You can’t ignore a lawsuit and expect it to just go away on its own, even if the statute of limitations has expired. You have to respond to the lawsuit and raise the statute of limitations as an affirmative defense. If you don’t respond, the debt collector might get a default judgment in your favor.
- Get legal advice. Again, when you’re facing debt collectors, you don’t want to go it alone. Get legal advice on your specific situation from an attorney with a proven track record getting positive outcomes for South Carolina debtors.
Contact Benjamin R. Matthews & Associates today
If you’re dealing with debt collectors and don’t know what to do next, our law firm can help. Contact Benjamin R. Matthews & Associates, LLC for a free, confidential consultation. There’s no cost and no obligation to hire us, just answers about your legal rights and options.