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Aggressive Credit Collectors and Zombie Debt: Who's at Fault?
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By Jo Anne Way
Feb 29, 2008 |
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Can you have a slew of Zombie debt even if you are not an irresponsible spender that just keeps using the credit card despite having no plan to actually pay it off? Or is it the fault of irresponsible lenders that continue to fork over huge loans to people that have no chance of ever paying them back and are headed towards bankruptcy.
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| Aggressive Credit Collectors and Zombie Debt: Who's at Fault? |
Actually it is neither. According to ABC News zombie debt is a bill a consumer never owed or had forgotten about and it comes back to haunt them once they apply for a loan. "Zombie debt is a phrase to describe all debt that a consumer had forgotten about or never even owed that comes back to haunt them," said Joseph Mauro, of the Consumer Protection Attorney.
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The report notes that at times credit collectors may go over the line when trying to collect these debts. CNN notes a whole bunch of horror stories about collectors. In one case a collector threatened to call a woman's place of work "until she lost her job," according to the National Consumer Law Center.
ABC News notes that consumers should recognize a statute of limitations exists and varies from state to state. Many allot about seven years where you cannot be sued or have your credit rating destroyed.
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Here are some mote tips provided in this CNN article. The Fair Debt Collection Practices Act requires that debt collectors treat you fairly. This doesn't mean you won't have to pay your legitimate debt. But here are some basic rights:
--A debt collector cannot call you before 8 a.m. or after 9 p.m., unless you agree.
--You cannot be contacted at work if the collector knows your employer disapproves.
--If you don't want to hear from a debt collector, write a letter telling them to stop. By law, they have to. Remember, the debt won't go away and you can still be sued.
--The debt collector can contact your attorney -- if you have one. If not, your friends and family can be asked about how to get in touch with you.
--A debt collector can't misrepresent the amount of your debt.
--A debt collector also cannot use profane or threatening language
The report notes that debt collectors also can't say that they will put a lien on your property or file a lawsuit unless the agency really means to do that and it's legal. And collectors can't legally claim federal benefits, such as Social Security or your retirement accounts, like your IRA or 401(k).
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