Zombie Debt - When You Should Be Scared (and When You Shouldn't)

TL;DR

Zombie debt refers to old debts that have changed hands multiple times and are still being pursued for payment, even if they are outside the statute of limitations.

Transcript

hey everybody John skiba here from the consumer Warrior YouTube channel and in today's video we're going to talk about zombie debt specifically when you should be scared and when you shouldn't but if this is your first time here to my YouTube Channel please click subscribe check on that little bell that way you'll be notified each and every week wh... Read More

Key Insights

• 🥶 Zombie debt refers to old debts that have been charged off and sold to debt buyers who continue to pursue payment through voluntary payments.
• ⚖️ Debt buyers profit from purchasing debts for a fraction of their value and collecting the full balance from debtors.
• 📁 Some debt buyers continue to pursue debts outside the statute of limitations, relying on voluntary payments rather than the ability to file a lawsuit.

Questions & Answers

Q: What is zombie debt?

Zombie debt refers to old debts that have been charged off and sold to debt buyers who continue to pursue payment, often changing hands multiple times.

Q: How do debt buyers make a profit from zombie debt?

Debt buyers purchase debts for a fraction of their value and try to collect the full balance from debtors, making a profit on the difference.

Q: Can debt buyers sue debtors for zombie debt outside the statute of limitations?

Debt buyers who have purchased older debts may still try to collect on them through voluntary payments, even if they cannot file a lawsuit due to the expiration of the statute of limitations.

Q: How can debtors determine if a zombie debt is still valid?

Debtors should check their credit report for the presence of the debt and review any written communication from debt collectors for information indicating that the statute of limitations has expired.

Summary & Key Takeaways

• Zombie debt is a relatively new phenomenon where old debts that have been charged off by credit card companies are bought by debt buyers who sue debtors to collect the full balance.

• Debt buyers often sell these debts to other buyers, leading to the debt changing hands multiple times.

• Some debt buyers purchase and try to collect on debt even if it is outside the statute of limitations, relying on voluntary payments from debtors.