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What Is "Zombie Debt" And How Can You Avoid It?

If you've recently received a Chapter 7 bankruptcy discharge, you're probably looking forward to a fresh start without the burden of unpaid bills or collection calls. However, in some cases, this debt (and the resulting calls) may continue to follow you in a phenomenon known as "zombie debt." What is this debt, and what can you do to combat it during the period of time you're not eligible to declare bankruptcy again? For further assistance, contact a local collections service, such as AA Fast Eviction Service. Read on to learn more about your options.   

What is zombie debt?

When you file for Chapter 7 bankruptcy protection, you're required to set out a list of all your debts. The bankruptcy court will also run a copy of your credit report to ensure that all listed creditors are notified of your potential default. When this happens, these creditors aren't permitted to contact you to seek repayment unless the bankruptcy case is dismissed. After you've received a discharge, your creditors will again receive notice that your debt is uncollectible and should be written off. 

Sometimes an error in communication or other oversight may result in your debt being sold to another company as valid debt, rather than being charged off by your original creditor. When this happens, you could begin receiving phone calls or letters from a debt collection agency that seeks to make good on this debt, not knowing it was extinguished through bankruptcy. Since this debt is officially dead but appears to be alive, it's commonly referred to as "zombie debt."

What are your options if you're being contacted for a debt you no longer owe?

In most cases, you or your attorney should simply be able to send this creditor a letter informing them that the debt is invalid and including a copy of the bankruptcy court's decree discharging this debt. After you've disproven that the debt is owed, the collection calls should stop. The Fair Debt Collection Practices Act (FDCPA) requires lenders to verify a debt in writing upon the borrower's request, and with the information you provide, your creditor will be unable to do so.

However, if you've found that the collection calls still aren't stopping, relief could be on the way. A proposed law could require creditors to update this information quickly and accurately, giving you the right to file a lawsuit against your bank or other creditor if they sell your loan after they knew (or should have known) it was discharged in bankruptcy.

About Me

My Functional Yet Space-Saving Home Office Furniture

Setting up a home office in my spare room enabled me to work from home. The problem was finding a way to maximize the space I had. I need to choose office furniture that would be functional yet space-saving. I chose a corner work station that included a combination computer desk with attached hutch. This gave me the ability to do computer work and store necessary supplies, without taking up a lot of room. A metal filing cabinet on wheels allows me the portability to store the cabinet in my walk-in closet when not in use. I purchased all my office furniture used, saving me money as well as storage space. Even in the smallest of rooms, working at home can be comfortable and affordable, if you're a savvy shopper.

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