Zombie debt collectors

What the heck is Zombie debt?

I found this nice article on MSN money. A friend of mine came over the other day and asked me about a letter they had received about a debt that was over 7 years old. The letter said the company would give a visa card to my friend for the amount of the debt owed over 7 years ago. If my friend paid it off then they would clear up her credit. Sounded a lot like what Liz Pulliam is talking about.

There’s money in old debt decade ago, most people who reneged on debts could rest easy after several years passed, since few creditors tried to collect on old bills, particularly for small amounts.Today, however, collecting on old debts is a rapidly expanding industry. Aggressive companies can buy charged-off credit card accounts from the original lenders for pennies on the dollar. Then, they use credit scoring and other new technologies to identify which debtors are most likely to pay. The players in this “junk debt” market range from fly-by-night outfits to well-established companies funded by Wall Street investors.

Zombie debt collectors dig up your old mistakes – MSN Money

Last year, more than $75 billion in old debts were sold. So I think we may be seeing the start of a new industry which is not rooted in law, so be very careful.

technorati tags:credit repair, zombie debt, collection, junk debt