What Is Zombie Debt?

Zombie Debt Explained in Less Than 4 Minutes

A woman holds her hands to her forehead while staring at her laptop screen in shock: her zombie debt has returned
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An old debt that is no longer legally enforceable but that suddenly has new activity from a collection agency is referred to as a zombie debt. 

While these newly revived debts can be scary to deal with, understanding your rights will help you decide how to deal with debts that have come back to haunt you. Let’s review how zombie debts work, and what to do when collectors try to come after them.

Definition and Examples of Zombie Debt

A zombie debt is an old debt that should be “dead,” but has recently had new collections activity. For example, zombie debt may be revived with new communication from a collection agency or a new debt collection on your credit report.

Often, debt is “dead” because it is time-barred, or no longer legally enforceable, meaning the statute of limitations has expired. The statute of limitations defines the amount of time debt collectors are able to sue you and use the courts to force you to pay a debt. This time period usually starts on the last date of activity on an account, which is typically the last time you made a payment. The statute of limitations for most debts is between three and six years, depending on your state and the type of debt.

However, zombie debts can also include:

  • Debts you've already paid or settled, so you don't owe a balance anymore.
  • Debts that were discharged in bankruptcy and should not be collected on.
  • Debts that are past the credit reporting time limit and have dropped off your credit report.
  • Debts that don't belong to you because of identity theft or mistaken identity.

How Does Zombie Debt Work?

Zombie debts can be revived when a new debt buyer purchases the account. They can also be resurrected if the collection agency notices activity on your credit report that indicates you may be motivated to pay, such as applying for a new credit card or a mortgage.

Certain actions can reset the statute of limitations, giving collectors more time to sue you, including making a payment or a payment arrangement on the debt. Check your state law for specific rules about when the statute of limitations begins and which actions restart the clock.

The statute of limitations is different from the credit reporting time limit, which defines the amount of time negative information can be included on your credit report (usually seven years).

You'll know a zombie debt has been resurrected when you suddenly start getting calls or letters about an old debt, or have an old debt pop up on your credit report. Rather than pay a zombie debt, you should first check that it's valid, it belongs to you, and it's within the statute of limitations. You're allowed to send a written request for proof to the collection agency and they're not allowed to collect from you until they provide proof. 

Do I Need to Pay Zombie Debt?

Zombie debts that pop up on your credit report can impact your ability to get approved for credit cards, loans, and other credit-related services. If you’re trying to qualify for a home or car loan, you may feel compelled to pay the debt to raise your credit score. Unfortunately, paying a zombie debt may give it more life.

Keep in mind that making a payment, even a small one, restarts the statute of limitations, giving the collection agency more time to sue. If you're not prepared to pay the full balance, avoid making any payment toward the debt.

In some states, even making a promise to pay the balance will reset the statute of limitations.

Collectors are allowed to try to collect zombie debts, but you don't have to pay, especially if the debt doesn't actually belong to you. Before making a decision about whether to pay a zombie debt, request proof of the debt in writing.

Sometimes collection agencies lack the legal documentation that proves you owe the amount being collected. Once the collection agency receives your request, they're required to show the proof or stop collecting on the account—which means they can no longer list the account on your credit report.

Key Takeaways

  • Zombie debt refers to old debts that suddenly are being collected again.
  • The statute of limitations, which varies by state, defines how long you can be sued over a debt.
  • Making a payment or payment arrangement can restart the statute of limitations, giving the collection agency more time to sue.
  • You don't have to pay an expired debt, but it can impact your credit if the credit reporting time limit hasn't expired.