Key takeaways
- “Zombie debt” usually means an old debt that resurfaces, often after being sold, sometimes when it’s already paid, discharged or not yours.
- Ask for the validation notice and check every detail before paying anything.
- If the debt is past your state’s time limit, a collector can’t sue or threaten to sue.
- In some states, a payment can restart the time limit.
- Debts discharged in bankruptcy or already paid shouldn’t be collected again.
You get a letter about a credit card you closed years ago, or a medical bill you thought was settled. The company is one you’ve never heard of. This is often called zombie debt: an old debt that comes back. Some zombie debts are real. Others were already paid, discharged in bankruptcy, or never yours. Here’s how to deal with it.
Why old debts come back
Old debts are often sold, sometimes several times, to debt buyers who pay a fraction of the balance and then try to collect. See what is a debt buyer. Along the way, records can get lost or mixed up. The CFPB and states have taken action against a major bank for selling debts that were inaccurate, already settled, discharged in bankruptcy or not owed.
Step 1: Don’t pay or admit anything yet
On a first call, don’t confirm the debt, promise a payment or give account details. Ask for the collector’s name, company, mailing address and phone number, and ask for written information about the debt.
Step 2: Get the validation notice and check it
The collector must give you a validation notice with the creditor’s name, the amount and how to dispute. See how to ask a debt collector to prove a debt. Check:
- Is it yours? Do you recognize the original creditor and account?
- Did you already pay or settle it? Look for old statements, settlement letters or bank records.
- Was it discharged in bankruptcy? Debts discharged in bankruptcy generally can’t be collected.
- Is the amount right?
If anything is wrong or unclear, dispute it in writing within the dispute period on the notice.
Step 3: Check whether it’s time-barred
Every state has a time limit for suing over a debt. Once it passes, the CFPB says collectors can’t sue or threaten to sue you over it, though they may still ask you to pay.
The CFPB also warns that a partial payment or acknowledging the debt may restart the time limit in some states. Read time-barred debt: what to do about old debts before paying anything.
Step 4: Check your credit report
Get your free reports at AnnualCreditReport.com. According to the CFPB, most negative information can be reported for seven years. That period is tied to when the account first went delinquent, so selling the debt shouldn’t restart it. If a very old debt shows up with a newer date, dispute it. See how to dispute an error on your credit report.
If you’re sued
Respond by the deadline, even if the debt is old. If it’s time-barred, you usually have to raise that yourself in court. See what to do if you’re sued for a debt.
If it might be a scam
Some “zombie debt” calls are scams. Threats of arrest, pressure to pay today, or requests for gift cards or wire transfers are red flags. See fake debt collectors: how to spot a scam.
Get help
- A legal aid office or consumer attorney can check your state’s time limits.
- You can file a complaint with the CFPB and your state attorney general.
The bottom line
When an old debt comes back, slow down. Get it in writing, check that it’s yours and the amount is right, find out whether it’s time-barred, and don’t make a payment until you’re sure. Old debts have special rules, and they’re there to protect you.
Sources: CFPB: can debt collectors collect a debt that’s several years old · CFPB: action against sales of bad credit card debt · CFPB: how long negative information stays on your report