5 States With The Most “Zombie Debt” Complaints - CBS News

Zombie debts have come back with a vengeance. Debt buyers pull these expired obligations out of cold storage and often use abusive and illegal tactics to collect. Zombie debts generally started out as legitimate obligations that had been settled, paid off, discharged in bankruptcy or rendered uncollectible because of various state statutes of limitation.  However, these uncollectible bills are often repackaged with other delinquent loans and sold into the secondary market, generally for pennies on the dollar. Buyers of this debt then attempt to collect on all of it -- including the expired obligations -- bringing the expired debts back from the dead.  "By all rights, this is debt that should have been extinguished, but it continues to come back to life," said Rowan Tepper, senior analyst at RewardExpert, which recently completed a study of zombie debt complaints that had been filed with the Consumer Financial Protection Bureau going back to 2011.  This analysis found that complaints about zombie debts have soared in recent years, jumping 66 percent in the first nine months of 2017 compared with the same period the year before. However, the chance of being pursued by back-from-the-dead debt varies dramatically based on where you live. In several states zombie debts are running rampant, according to RewardExpert's research.

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