# Understanding Zombie Debt: Definition, Risks, and How to Handle It

![Zombie Debt](https://www.investopedia.com/thmb/GgDnIgQLCn7LYE86YvvdKwvANJs=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/zombie-debt-Final-032767f0a7574d3896e76a44442848b2.png)

*— Investopedia / Theresa Chiechi*

## What Is Zombie Debt?

Zombie [debt](https://www.investopedia.com/articles/pf/12/the-debt-spiral.asp) is old debt that is no longer legally collectible. However, debt collectors might still try to collect it, somewhat reviving it.

It is potentially illegal to collect debt passed the statute of limitations. Debt collectors will use aggressive and intimidating methods to try and collect zombie debt, posing a risk to one's financial standing. There is protection offered by the Fair Debt Collection Practices Act (FDCPA) that limits the behaviors and actions of the debt collectors. Try not to spend too much time on the phone with them; instead, gather their address and mail a certified letter to dispute the debt. The biggest potential consequences of interacting with zombie debt are restarting the statute of limitations.

### Key Takeaways

*   Zombie debt is debt that collectors attempt to collect on despite it being beyond the statute of limitations.
*   Debtors have no legal obligation to repay zombie debt, but collectors can be aggressive.
*   Paying any amount on zombie debt can restart the [statute of limitations](https://www.investopedia.com/terms/s/statute-of-limitations.asp), harming your credit report.
*   Debtors can protect themselves from harassment through the Fair Debt Collection Practices Act (FDCPA).
*   If contacted about zombie debt, request proof of the debt and limit contact with the collector.

## Understanding the Mechanics of Zombie Debt

Zombie debt generally refers to debt that is more than three years old, which has either been forgotten about, already paid off, or belonged to someone else. It can also be the result of identity theft, a computer error, or a fraudulent attempt to collect on a debt that does not exist.

Original creditors usually give up on the debt and sell it to collection agencies. These collectors may resort to harassment and threats.  

### Navigating the Statute of Limitations on Debt

In most states, lenders can only pursue debt collection for three to six years, sometimes less. Even after the statute of limitations, the debt is valid, but you're not legally required to pay it. Companies buying uncollectible debts are playing a numbers game. They only need a few people to repay their debts to be profitable.

If you're targeted by these collections, be cautious. There is no benefit in paying a debt that is beyond the statute of limitations because paying anything will restart the statute of limitations, put the debt back on your credit report, and enable the debt collector to take you to court.

## Responding Effectively to Zombie Debt Collectors

Debtors can protect themselves from harassment under the [Fair Debt Collection Practices Act](https://www.investopedia.com/terms/f/fair-debt-collection-practices-act-fdcpa.asp) (FDCPA). This particular law limits the behavior and actions of third-party debt collectors and restricts the means and methods by which they can contact debtors, as well as the time of day and number of times contact can be made.

The important thing is not to spend any time on the phone with the debt collector. Ask for their address and send them a certified letter within 35 days of contact. Dispute that you owe the debt and ask them to prove that you owe it.

If they keep contacting you, send another letter stating that they can only write to you or notify you about a lawsuit. If the debt is beyond the statute of limitations, the collector will probably go away.

> **Article Sources**
>
> 1.  Federal Trade Commission (FTC). "[Fair Debt Collection Practices Act](https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text)."