Neil L. Sobol
Texas A&M University – School of Law
November 5, 2013
By obtaining judgments or persuading consumers to pay a portion of these debts, acknowledge these debts, or enter into new agreements, collectors can transform these debts thought to be “dead” or non-existent, into “living” and enforceable debts. The media have labeled these resurrected debts as “zombie debts.” Just as the zombies in movies come back from the dead to terrorize individuals, dead debts may resurface to cause havoc for consumers. Even if a consumer successfully defeats one zombie-debt collector, the process may restart when the debt is resold.
Legal scholarship has only begun to address the issue. The scholarship has primarily focused on the collection of zombie debts through the court system; however, the abuses are not limited to litigation. Collectors are often successful in persuading consumers to pay dead debts without filing lawsuits. Moreover, efforts to make it harder for collectors to sue on unenforceable debts may increase pre-litigation abuses. Accordingly, this Article addresses zombie-debt issues before the onset of litigation. It identifies the failure of traditional methods to deal with this growing problem and proposes amendments to the federal Fair Debt Collection Practices Act to establish uniform standards for the transfer of information and documentation to debt buyers and consumers. Furthermore, penalties and limitation periods should be set to deter debt buyers from violating the Act. Finally, the Article emphasizes the importance of providing assistance and education to consumers and suggests that the recently formed Consumer Financial Protection Bureau coordinate a federal, state, and local attack to combat zombie debt.
Accepted Paper Series