This is a scary story from the New York Times. You think zombies are just on bad tv shows and in movies. But it turns out, that there are zombies in real life: zombie debts, at least. Here is the opening paragraph from the Times story: “In the netherworld of consumer debt, there are zombies: bills that cannot be killed even by declaring personal bankruptcy.”
Yes, zombie debt still exists – even after you file for bankruptcy. So, let me start at the beginning. When you file for bankruptcy, if your bankruptcy, especially a Chapter 7, is discharged, then your debts are supposed to go away. That means you do not owe the money anymore. That is why people file for bankruptcy. You cannot pay your bills, so you file for bankruptcy, and your bills go away. Makes perfect sense.
But, alas, in the world of debt collection, nothing that makes sense actually happens. Debt collectors will try to collect money from you even if it is not your debt, even if you never owed the money, even if they have the wrong person! So, this should not come as a surprise.
Yet, I admit it – this article surprised me. I know that debt collectors and creditors will sometimes send a letter after a bankruptcy. But, this takes it to a new level. It is, essentially, blackmail. They are saying “We know you don’t owe the money, but if you don’t pay us, we are going to continue to screw with you.” That is not fair – and it is not legal.
Here is my advice: if you file for bankruptcy, do NOT assume anything is ever finished. Every fourt months, or three times a year, you should check your credit report. I have a prior post on this, but essentially go to Annual Credit Report, get Experian the first time, wait 4 months, get Trans Union, wait 4 months, get Equifax. This allows you to constantly check your credit report and see if debts are being reported.
If these debts, which were discharged in bankruptcy, are being reported, you need to call an attorney to work with you to get it removed.