Zombie Debt – Bringing dead debt to life
One of the violations of the Fair Debt Collection Practices Act (FDCPA) enforced by the Federal Trade Commission (FTC), is collecting a non existent debt. Debt Collectors resort to creating phantom debts or bringing old and paid debts to life in search of easy money.
Creditors, unable to recollect debt from debtors, usually sell debts to third party debt collectors. These third party debt collectors are over zealous to extract money from innocent consumers. The debt collectors buy debts from creditors for a throw away price and have nothing to lose. However, each debt collector's commission is calculated on the basis of his ability to collect payments on debts.
Debt collectors need prey to feed on. You are the vulnerable victim that they have found for this purpose. Debt collectors bet on your lack of knowledge of your rights in the FDCPA. They often dig out old debts either completely paid or written off or have crossed the Statute of Limitations. These are called zombie debts. They are used by debt collectors to intimidate you to pay up. You have rights in the FDCPA that protect you from such debts.
If you are being harassed by a debt collector for an old debt of yours which you have repaid completely, you have to use your first tool – ask for validation of the debt within 35 days of the first call from debt collectors. Ask the debt collectors to send complete validation of the debt along with the name of the original creditor and details of the amount spent. Your request should be made in writing and the letter sent via certified mail with return receipt request. This should stop the debt collectors in their tracks because it is very difficult for debt collectors to validate a debt that is so old.
Like everything else debts also have expiry dates. The Statute of Limitations (SOL) is the maximum time a debt collector can collect the payment from you. Even after the SOL expires, if debt collectors contact you, you can counter by sending a cease and desist letter to the debt collectors through certified mail with return receipt request. If the debt collector sues you, you may go to the hearing with the SOL and prove your case.
Cease and desist letter is a formal written request to debt collector to stop any further communication with you. This letter should stop the collector from calling you any further. If he continues to call, you can take legal action against him for violation of the FDCPA.
You may engage an attorney to handle the legal aspects of the case and intimate the debt collectors about this. Once you engage an attorney, debt collectors cannot contact you. If he still does he can be sued for this violation of the FDCPA.
Debt collectors cannot legally send your debt payment history to credit bureaus within the 30 days period for debt validation. If he reports, you can dispute the credit report by sending a credit dispute to the credit reporting agencies. It would be better to include a copy of the debt validation letter you sent to debt collectors.
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If you are a victim of debt collectors harassment, you should be aware that the Fair Debt Collection Practices Act FDCPA has stringent rules to deal with it. These rules define harassment by debt collectors.
The RFDCPA differs in this as the RFDCPA includes creditors as debt collectors.
The Fair Debt Collection Practices Act (FDCPA) is a federal act that came into existence to ensure fair debt collection. The act is enforced by the Federal Trade Commission (FTC) and private attorneys to protect consumers from unfair practices of the third party debt collectors.
The FDCPA lays out several categories of abusive and illegal debt collection practices and provides remedies you can use if you are abused by a debt collector or debt collection agency.
The Fair Debt Collection Practices Act exists to protect consumers from predatory and illegal debt collection techniques. No matter how much money a consumer owes, any collection efforts need to follow the rules outlined in the FDCPA.
Your rights under the Fair Debt Collection Practices Act
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Many people who enter the bankruptcy process worry about the fate of their credit. This is actually unnecessary as the bulk of credit damage happens before the bankruptcy process is even initiated. While no one wants the added hassle of rebuilding their credit after resolving debt troubles, doing so can put you leaps ahead of others in the credit game.
Americans are now filing Chapter 7 or 13 Bankruptcy to get their debts under control. Bankruptcy in itself is designed for debt elimination. Chapter 7 bankruptcy functions to cancel out unsecured debt such as utility or medical bills, credit card, etc. Chapter 13 Bankruptcy on the other hand is designed to give individuals more time in repaying all their debts.
Filing for bankruptcy is good news whenever you are struggling with your credit card debt, mortgage or medical bills. Bankruptcy laws help families and individuals in their debt struggles. You have two options on how to deal with your debt problems, Chapter 7 (debt elimination) and Chapter 13 (reorganization). Always remember that you can regain credit again after successfully filing your bankruptcy.
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