In 2010 there is expected to be more than 1.5 million bankruptcies filed. Many of the people filing for bankruptcy have accumulated their debt over the last 5 to 10 years. After filing for bankruptcy it's important to keep an eye on your credit report to make sure that your bankruptcy, and all past debts have been reported correctly. It's crucial to be diligent about checking your credit report every six months to one year at the long end if you ever want to have credit again. Recently, many consumers that have already filed for bankruptcy have collection agencies calling them trying to collect on an old debt that was included in their bankruptcy. Many of these debts were sold from the original creditor and picked up by aggressive companies that buy charged off debts for pennies on the dollar. These are what people call zombie debts. They are debts that never seemed to die no matter how old and uncollectable they really are. These companies that buy junk debt, try to use new technology to find which debtors would be most likely to pay. It starts with a simple phone call and gets more aggressive from there. If you're in this situation, immediately start questioning the collector about the debt and do not answer their questions. Never acknowledge anything about the debt, or agree to make any kind of payment on that debt. If after filing bankruptcy one of your old debts comes back to haunt you from a zombie debt collector get as much information as you can about the debt collector, the debt, and the amount owed. Ask them to send it to you in writing and then contact your bankruptcy attorney to handle it from there.
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In 2007 there was an article in Business Week that discussed this entire problem. The author in the article reported on the many companies that are buying and selling debt that they know has been discharged in bankruptcy. They try to collect this debt after unlawfully trying to revive it by shady collection activities. Many of these debts are so old that they are not even collectible due to the Statute of Limitations. Their aggressive tactics scare people into paying the debt even though it's not legally collectible.
That's why it's important when filing bankruptcy to always include every debt, even debt that was charged off. Many people think just because the debt was charged off they can't come back and be collected. When including debt on your bankruptcy petition more is better. Charged off debt is basically an accounting term, meaning that the creditor or is taking it off their books to write it off in their tax year. Many creditors that want to have a better bottom line will sell the debt to get the bad debt off their books. Usually, collection agencies are the ones that purchase these debts. The sale of the debt does not cancel the debt nor make it uncollectable. The problem lies when the debt is included in a bankruptcy filing it should be wiped out but since the debtor has no idea of that sale or transfer of the debt they only include the original creditor. According to bankruptcy law this should be sufficient. That's why when a post bankruptcy debtor gets contacted on one of these zombie debts it's best to turn it over to your bankruptcy attorney to pursue the debt collector with legal action threatening them with damages.
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