What is zombie debt?

Zombie debt is a term the credit industry uses to describe debts that resurface in collections.1 These debts can be up to three years old or more. Unlike what happens if you don’t pay a loan company back, this creepy debt has not affected your credit—until now!

If undead debt haunts you, we’re glad you stopped by this blog! We have some tips, tactics to help protect yourself from zombie debt, and strategies to prevent zombie debt in the future.

What Are the Different Types of Zombie Debts?

These are a few common examples of zombie debt and what you can do to protect yourself from zombie collectors: 

Type of Zombie DebtHow It OccursWhat to Do
Credit Card DebtAn old credit card you forgot to pay off resurfaces after several years.Check the SOL in your state. You can dispute the debt with the credit bureaus if it has expired.
Medical BillsAn unpaid medical bill is suddenly being pursued for collection.Request a validation letter from the debt collector and verify the details.
Student LoansYou thought student loans were deferred or in forbearance, but debt scavengers contacted you.Student loans often don’t have a SOL. Contact your loan servicer for accurate information.
Utility BillsAn old utility bill from a previous residence comes back to haunt you.Ask the debt collector to describe the debt and provide proof. If it’s too old, it may be outside the SOL.
Auto LoansYou defaulted on an auto loan years ago, and now a collector is trying to collect.Check if the debt is within the statute of limitations. If it’s not, you can dispute it.
Mortgage DebtYou sold a house years ago, but there was a remaining balance that you weren’t aware of.Request a debt validation letter and consult with a legal advisor to understand your options.
Retail DebtAn old account with a retail store for unpaid items is now being collected.Verify the age of the debt. You can dispute it with the credit bureaus if it’s outside the SOL.

How Zombie Debt Works

You can feel the cold, annoying hand of zombie debt in many ways. Here are a few of them:

Original Creditor Error

Zombie debt can be something you and your creditor forgot about. However, some audits of their books have discovered that you need to start the debt settlement process. Debt settlement is an agreement between a creditor and a consumer in which the total debt owed is reduced and repaid in a lump sum instead of revolving monthly.2

Time-Barred Debt

Except for student loan debt, most debt has a statute of limitations (SOL). After several months or years, no debt collections agency can sue you or attempt to collect the original debt. The statute of limitations on any debt depends on the state where it originated. Still, the average time frame is 3-6 years.

It’s Someone Else’s Debt

It can be hard to believe, but huge mistakes can happen even in our high-tech age. It is common for debt collectors to go after the wrong person. If two people share a name or share the same address, their information can be merged during a bad data transfer made by third-party debt collectors.

Identity Theft

It’s also possible that the issue with your zombie debt could be much more severe. You could be a victim of identity theft—a financially devastating crime where someone else uses your personal information to open new accounts or make fraudulent purchases in your name.

If you discover you have been a victim of identity theft, inform your bank and creditors as soon as possible. Suppose there is a fraudulent variable rate loan on your credit report. In that case, you need to file a report with the Federal Trade Commission to help stop the identity theft from further damaging your credit.

Debt and Your Credit Report

Your credit report records how you manage and pay down the old debt you owe. Credit reports keep track of financial activity, such as: 

  • Your payment history
  • Your credit utilization 
  • The length of your credit history
  • The types of credit accounts you have 
  • The loan inquiries you have made

Since your credit score is a picture of your financial health, you want to protect it. Learning how to correct errors on your credit report is how it’s done. If an old debt reappears and attaches to your credit report, such as a cosigner loan, it could decrease your credit score. 

Bad credit can keep you from getting a job or your dream apartment, so keeping it as strong as possible is critical.

What is a Debt Collector

A debt collector is someone hired to pursue you for the money they believe you owe. Debt collectors work with people to pay or settle their past-due zombie debts and delinquent accounts.

Debt collectors can work directly for your original creditor or be employed by a third-party debt collection agency. Some creditors also use law firms that specialize in debt collection. Typically, debt collectors are paid a portion—anywhere up to 50%—of the money they collect.

How to Deal with Zombie Debt Collectors

Zombie debt can come in the form of old bills, settled debts, and other accounts that you may have thought were a thing of the past. Here are some things to remember when dealing with getting this debt off your back:

Never Admit the Debt is Yours

Some debt collectors will try to collect zombie debt that has not only passed its statute of limitations but may not even be yours. The second you claim responsibility, you can be on the hook for thousands, so never claim a debt over the phone.

Make Time to Talk (Or Don’t)

Once zombie debt rises from the financial depths, it won’t stop looking for you. It will be much easier for you to pick up those phone calls and start fighting the zombie debt. 

When you hop on the phone call, remember to do nothing but verify any contact information they have for you and the debt amount. If you don’t want to talk, tell them they can send you documented information (see below) and disconnect the call. Even though they’re trying to collect, you’re in charge.

Take Notes

When you talk to a zombie debt collector over the phone, document the following information:

  • The phone number
  • The date and time of the call
  • The amount you allegedly owe
  • The name of the creditor making the claim

Zombie debt collectors are like the real thing—they can get menacing. Be sure to take note of any threats of action.

Get Everything in Writing

Request a debt validation letter from the debt collector showing proof of your debt connection. Any reputable debt collector will have no problem sending you a validation letter. But, if you think you are part of a scam, contact the Federal Trade Commission and file a report.

Know Your Rights

Debt collectors can be aggressive and intimidating. Debt collection agents are trained to be assertive, but many can be downright bullies. Fortunately, there are protections out there for consumers:

  • Fair Debt Collection Practices Act — The Fair Debt Collection Practices Act is a federal law that limits the number of times you can be contacted in a day. Additionally, it gives you the right to be contacted by zombie debt collectors through your preferred method of communication.
  • Consumer Financial Protection Bureau — The CFPB is a federal government agency that sets the rules for finance companies’ operations. Recently, the CFPB enacted a rule that requires zombie debt collectors to tell consumers they can’t take them to court. The rule also requires debt collectors to inform you that you could face legal action if you pay the debt.

FAQs About Zombie Debt

How do I know if a debt on my credit report is a zombie debt?

If you see an old balance suddenly reappear on your financial report, it might be a zombie debt. Typically, these debts are three years old or older and have previously fallen off your report. Always double-check the details and dates to confirm.

Can zombie debt collectors legally sue me for unpaid debt?

The ability of zombie debt collectors to sue you often depends on the statute of limitations, which varies by state and type of debt. If the statute of limitations has expired, debt buyers can’t legally sue you. However, acknowledging the debt might restart the clock, so be cautious.

What should I do if a debt collector contacts me about an old debt?

If debt scavengers contact you about an expired debt, don’t acknowledge it immediately. Ask them to describe the debt in detail and request a validation notice. This will give you the information you need to confirm whether the debt is legitimate and within the statute of limitations.

How can I remove zombie debt from my credit report?

If you find that a zombie debt has reappeared on your credit report, you can dispute it with the credit bureaus. Provide any evidence you have that the debt is too old to be collected or that it has been paid off. The credit bureaus are obligated to investigate and remove inaccurate information.

Will settling a zombie debt improve my credit score?

Settling an old debt that has become a zombie debt may not improve your credit score. In fact, it could potentially harm it by updating the “last activity” on that account, making the debt appear more recent than it is.

Can credit card debt become zombie debt?

Yes, credit card debt can become zombie debt if it’s old and hasn’t been addressed for several years. Just like other types of debts, credit card debts have a statute of limitations, after which they can’t be legally collected.

How can I protect myself from scams related to collection agencies?

Always verify the information when zombie debt collectors contact you. Request a validation letter of the debt and check if the company is registered to operate in your state. If something seems off, you can file a report with the Federal Trade Commission for further investigation.

Final Thoughts on Zombie Debt From CreditNinja 

Zombie debt is a term the credit industry uses to describe debt that’s come back from the past to haunt you. Zombie debts can hurt your credit and directly affect your life. If it turns out that you owe the debt in question, take care of it quickly. 

The good news is that online loans are available to help consolidate and pay off old debts. For example, consumers could get personal loans with bad credit through CreditNinja! Our credit requirements and rates are flexible. 

If you’re wondering, “How much can I borrow with a personal loan?” know that you could get a quick approval decision via our website! 


  1. Zombie Debt │ KBTX
  2. Does Debt Settlement Make Sense for You? │ National Foundation for Credit Counseling
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