How to Fight Back against “Zombie Debts”

If you think zombies are only found in the movies and in popular TV shows then you’re dead wrong. (Pun intended.) The fact is,  “zombie debt” is any debt that just doesn’t seem to ever die or go away. This can include judgments that may haunt your credit for years or even decades, tax liens that keep you from purchasing a new home or car, student loans that follow you all the way to the grave or medical debts that are trying to kill you financially.

While that may have sounded a little bit overblown, the fact is that dealing with zombie debt is a real fact for millions of Americans and can be quite scary. If you’re dealing with this kind of debt and you need help, you’re in luck because today’s blog is going to give you advice about just that very thing and help you to fight back and, hopefully, slay that zombie (debt). Enjoy.

The first thing that you have to do if you are faced with zombie debt is simply to buck up and face your fears. Not dealing with credit problems is the worst thing to do and certainly won’t help them to go away. In many cases you’ll  simply have to pick up the phone, call your credit card company or that nasty debt collector, try to stay in a good mood and take care of the problem. No matter what you do you should definitely get your free credit reports from the “Big 3” credit agencies and find out what your credit really looks like. In many cases you’ll find that it’s not as bad as you might’ve thought.

Your next step is simple as well; negotiate. Most credit card companies and even some collection agencies are more than happy to negotiate when it comes to paying off your debts because it means that, instead of fighting and wasting money for years, they’ll at least get something. You will also get something as well, which is relief from that zombie debt grip and the ability to start putting your financial house back in order. Whatever type of negotiation and deals that you can come to, remember that you should always get them in writing before you pay anything. The worst thing that could happen is that you pay a huge chunk of change and then find out that your problem still isn’t solved and your zombie debt is still alive.

Knowing your rights is also vital. The fact is, federal law provides for specific “stop collection actions” that allow you to dispute a debt or at least request verification of that debt to make sure that it’s actually correct. If you dispute a debt then a collector must, by law, investigate it  and respond before they can start resuming any type of collection action. If the statute of limitations has expired they legally have to take it off of your credit report. If you are being hounded by collection agencies you can also send them a “cease contact letter” and, again by law, they must stop contacting you except for any notification of legal action that they might take. It may not be a stake to the heart but it will at least slow them down a bit.

Patience is also very important when it comes to zombie debt. During the first few years after your financial problems begin you’ll find that  your credit is a wreck, which is normal. Over time however the information will get older and have less of an impact on your credit score (as long as you don’t make any other, new credit mistakes). With time all of the negative items that you have on your credit report will go away completely and you’ll be able to start fresh. This takes between 7 to 10 years depending on the credit problems that you had. (Remember, zombies are hard to kill but they can be killed.)

Lastly there’s Bankruptcy, your last step and the ultimate weapon in wiping out your zombie debts. This can stop credit collectors in their tracks and force others, including your home mortgage lender, to enter into negotiations with you. It’s not the best option because it’s going to affect your credit for about 10 years but, if you’re drowning in debt, it may be the only one you have and the only one that allows you to finally get your financial life back in order and destroy that zombie debt forever.


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3 thoughts on “How to Fight Back against “Zombie Debts”

  1. Simon @ Modest Money

    Zombie debts might actually be a little bit hard to conquer…processes get complex and at times expensive and you never know what might crop up from the woodwork down the road. That said, you do offer excellent ways to tackle them. Having a plan to tackle them cannot be overemphasized, so is having an emergency fund to tide you over when baby zombies debt problems creep out of the paper work.
    Beyond that, one should keep consistently at it until all pesky zombie debts are analiated!

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