Debt Collection, Debt Relief

Understanding Zombie Debt and the Statute of Limitations

Consumer debts have what is called a statute of limitations. This is the amount of time the creditor can use the court to force a consumer to pay a debt. After the statute of limitations has expired on a debt, it is no longer legally enforceable. Occasionally, however, a consumer may be contacted regarding an old debt by a collector who hopes the consumer will ‘restart the statute of limitations.’

Zombie debt is debt that the consumer thinks is “dead,” meaning it is past the statute of limitations that the debt collector is now trying to bring back to life. While the debt collector cannot take the consumer to court to collect on the debt, there are no laws saying they cannot continue to contact the consumer to collect what is owed. Many times, debt collection agencies will purchase expired debt to turn a profit. Since the cost to buy expired debt is exceptionally low, even if they collect on a handful of accounts, they are still earning a profit.

Understanding the Statute of Limitations

Every state has a set of laws that governs how long a person or entity has to bring a legal claim on any given issue, including debt collection. If a claim is brought after that period has passed, the claim will likely be barred. When it comes to debt collection, this timeline is five years from the date the debt began for written contracts, including personal loans. If the debt is one with a revolving account, including credit card debt, the statute of limitations is four years.

The statute of limitations for collecting on debt in Florida typically is five years. Old debt falls off a consumer’s credit report after seven years. However, if a consumer is past the five-year mark but pays on a debt that is expired, this payment will reset the clock on the debt’s statute of limitations. Once that happens and the consumer has acknowledged the debt is his or hers through payment, the collector once again can sue him or her to collect or can report the debt to the credit bureaus.

A collector pursuing an expired debt is hoping a consumer will not know the laws or will not know better than to make payment, especially if the collector is particularly aggressive or convincing. It is important that a consumer always request written verification of a debt before making payment. Debt collectors are legally obligated to provide this verification, once requested, and this written documentation will allow the consumer to verify if the debt is past the statute of limitations. If it is, the consumer has no legal obligation to make payment on the debt.

The most common types of expired or old debts that debt collectors pursue include the following:

  • Debts that are either discharged or settled,
  • Debts that are past their statute of limitations,
  • Debt that has already fallen off of the consumer’s credit report, and
  • Debt that does not actually belong to the consumer.

If a debt collector continues to contact the consumer on time-barred or expired debts, the consumer is within his or her rights to tell the collector to cease contacting him or her. Under the Fair Debt Collection Practices Act (FDCPA), if a consumer sends written communication to a debt to collector who is harassing him or her on a time-barred debt, that consumer can file a complaint with the CFPB against the collector, report the violation to the Florida attorney general’s office, or can sue the debt collector for damages.

If the debt is past the statute of limitations but is still on the consumer’s credit report, occasionally it can make sense to negotiate a settlement to pay off the debt for the purpose of having the debt removed from the consumer’s credit report. However, if the debt is already off the person’s credit report, making any type of payment can revive the debt and will allow the collector to report it again to the credit agencies. At that point, it is wise to inform the collector that the debt is time-barred and not legally collectible and request that the collector cease and desist any future communications.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at

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