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Zombie Debt

“Zombie” debt is debt that should be dead, but has come back from the grave to haunt you.

Junk debt buyers find and buy portfolios of old debts from banks, credit card issuers, utilities, telecom companies, health clubs, auto finance companies, and other creditors for pennies on the dollar. They then dun or sue you, often with little or no evidence. In many cases, the debt is past the statute of limitations. For example, the statute of limitations on a credit card in Illinois is generally 5 years, measured from default or last payment. On a contract for the sale of a car, gas or oil, or other “goods,” it is 4 years in Illinois and most other states.

The debt buyer hopes that you will be frightened into paying or ignore or not know how to deal with a lawsuit, so that it gets a default judgment. Once the debt buyer has a default judgment, it does not have to prove anything, and the debt comes to life again for 20 years or more.

Debt buyers operating in Illinois include Asset Acceptance, Autovest, CACH, Cavalry, CGR, Galaxy Asset Purchasing, HBLC, JRSI, LVNV Funding, Midland Credit, Midland Funding, MSW, NCEP, NCO, Palisades Collection, Portfolio Recovery Associates, PYOD, Resurgence, Resurgent Capital Services, and Unifund.

We can help you deal with zombie debt.

If you are being called or sued in Illinois for a zombie debt or by a debt buyer, contact us and we will review the case for nothing. We often can defend the case for a modest fee. If there has been a violation of the Fair Debt Collection Practices Act or other law, we can make the debt buyer pay you.

We claim no credit for the term “zombie debt.” Liz Pulliam Weston,‘Zombie’ Debt is Hard to Kill, CollectorsDigUpYourOldMistakes.aspx; and Jane Kim, Dealing with Debt that Refuses to Die, Wall Street Journal, Sept. 30, 2008, at B1.