Zombie Debt: When Collectors Chase Old Debts They Can't Sue For

That debt from 10 years ago? They can't sue you for it. But collectors buy these "zombie debts" for pennies and try to collect anyway. Here's how to fight back.

What Is Zombie Debt?

Zombie debt is old debt that's past the statute of limitations. The creditor can't sue you to collect it - but that doesn't stop collectors from trying.

Debt buyers purchase these accounts for 1-2 cents on the dollar, then try to collect the full amount. If they collect $100 from you on a $5,000 "debt" they paid $50 for, they've doubled their money.

How Statute of Limitations Works

Every state has a time limit for suing on debt. After that limit passes:

• They cannot sue you to collect
• They can still ask for payment
• They cannot threaten to sue (that's illegal)

Common State Statutes (for written contracts)

These vary - check your state's specific laws.

The Zombie Debt Trap

Here's the dangerous part: in some states, making a payment or even acknowledging the debt can reset the clock.

This is why collectors love zombie debt. They call you about a 15-year-old credit card bill, scare you into making a $50 "good faith payment," and suddenly they can sue you for the full amount.

How to Protect Yourself

1. Don't Acknowledge the Debt

Never say "yes, that's my debt" or "I'll try to pay." In some states, verbal acknowledgment restarts the clock.

2. Don't Make Any Payment

Even $5 can restart the statute of limitations in some states. If the debt is old, don't pay anything until you know your rights.

3. Request Debt Validation

Send a debt validation letter within 30 days of first contact. They must prove:

• You actually owe the debt
• The amount is correct
• They have the right to collect

For old debts, they often can't prove any of this. Records get lost. Accounts get sold multiple times.

4. Know the Date

The statute of limitations usually starts from:

• Your last payment, OR
• Your last activity on the account, OR
• When you defaulted

If it's been longer than your state's limit, they can't sue.

When Collectors Break the Law

Collecting zombie debt is legal. But many things collectors do during collection are NOT:

• Threatening to sue when they legally can't = FDCPA violation
• Trying to restart the clock through deceptive practices = FDCPA violation
• Reporting to credit bureaus debt that's past the 7-year reporting period = FCRA violation
• Misrepresenting the amount owed = FDCPA violation

Credit Reporting: A Different Clock

Important distinction:

• Statute of limitations: How long they can SUE you (varies by state, 3-10 years)
• Credit reporting period: How long it can appear on your credit (7 years from first delinquency)

These are separate clocks. A debt might be too old to sue for but still on your credit report, or vice versa.

The Bottom Line

Zombie debt collectors are betting you don't know your rights. Now you do.

• Don't pay anything on old debt without consulting an attorney
• Request validation
• Check your state's statute of limitations
• If they threaten to sue on time-barred debt, that's a lawsuit waiting to happen - for YOU against THEM