Rise of the Living Debt: The Sequel
Previously:
Now:
The situation that happened to our imaginary customer/debtor is not something new. As a matter of fact, the debt-buying industry is flourishing because of the hundreds and even thousands of dollars they are earning from buying zombie debts.
There are numerous reports received by the government agencies like the Federal Trade Commission of debtors being harassed by collection agencies to pay debts that are way beyond the stature of limitation.
There are even some instances that collection agencies contact person who had debts that are at least 9 or 10 years old. They play on the debtor’s fear, ignorance and confusion. More than often, they threaten the debtor that he/she will go to jail if he/she will be unable the debt. The thing is, debts that become seven years old are already removed into the credit report. Whether that particular debt was not paid in full or has lapsed is of no great importance. The creditor would then, most often than not, write such debt as loss. Some debt collection agencies take fancy of such old debts and buy them at a cheap price. They then try a way possible to collect as much of these old debts as they possibly can. They even report these old debts to the credit bureaus as “new”, uncollected debts. Such practice is coined as re-aging. Re-aging is considered illegal in
Thus going back to our creditor haunted by the zombie debt, what she can do is face her fears. The best course of action to take is to contact the credit bureaus. If there is sufficient evidence that the debt is beyond seven years, then it can easily be discarded. If worse comes to worse and you do not have proof , immediately call the credit bureaus again and demand that the collection agency provide proofs that the debt is indeed recent and legitimate.
Under the Fair Debt Collection Practices Act, debtors can file the necessary legal action if collection agencies are doing something illegal such as harassing or threatening them.
