Mar 2, 2025
In the wake of her husband’s death 25 years ago, Scott’s mom, Beatrice, went through some hard times and couldn’t pay her credit card bill. The credit card company cancelled her card and sold the debt to a collection agency that aggressively and frequently called but never took the legal action they threatened.
Eventually, Beatrice got back on her feet again, the debt collectors stopped calling and her credit score recovered. Still, Beatrice never paid the debt and, although she eventually forgot about it, the debt remained outstanding.
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Then, about a year ago, debt collectors began calling again. They threatened to hurt Beatrice’s credit score and take her to court. Feeling pressured, she agreed to start paying $200 a month.
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But Scott believes the statute of limitations has long expired and is wondering if his mom — after making monthly payments for the past year on decades-old debt — can simply stop paying.
Understanding the statute of limitations on your debt
The statute of limitations is the amount of time a creditor has to file a lawsuit to collect a debt after the borrower has defaulted. This varies by state and by type of debt, and ranges from three years to eight years for open debt, which includes credit card debt. Written contracts, oral contracts and promissory notes are treated differently in many states and the statute of limitations for these can be much longer.
Typically, the statute of limitations is calculated from the date of the last payment made on the debt. If, before the statute expires, you make a payment, agree to a settlement or payment plan, put a new charge on the account or acknowledge the debt, the statute of limitations will restart from the date you do so. Once the statute has expired, however, the debt is statute barred. That means debt collectors can still try to collect the debt, but they can’t sue you.
Sometimes, debts that are long forgotten and have fallen off your credit report will be revived by debt buyers. They may try to get you to acknowledge the old debt or make a payment, which could then revive the statute of limitations on this so-called zombie debt and allow them to take legal action to collect it.
The consequences of making a payment on the debt after the statute has expired varies by state — and it can be a grey area, adding to confusion and complexity around the matter.
In some states, such as Texas, making a partial payment isn’t enough to restart the statute of limitations, but in other states, such as New Hampshire, where Beatrice lives, making a payment may constitute an acknowledgement of the debt and may be sufficient to restart the statute of limitations, allowing the debt collector a new opportunity to sue.
In Beatrice’s case, she may need to keep making payments because stopping them now might hurt her credit score and potentially lead to legal action.
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What to do if you’re being pursued for zombie debt
If you find yourself being pursued for zombie debt, don’t agree to make any payments until you’ve verified that the collector has a valid claim. Start by requesting a debt validation letter that provides details of the debt. According to the Fair Debt Collection Practices Act (FDCPA), this must be mailed within five days of the collector’s first contact with you.
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If the debt isn’t in your name, if the collector is unable to provide sufficient details or if you believe they’ve made inaccurate claims, you can send them a debt verification letter within 30 days to dispute the debt. If you’ve already paid the debt, you can send them proof and ask them to stop contacting you.
If they can’t verify your debt — for instance, if the debt is statute barred — they are required to stop contacting you and to notify the credit bureaus. If this happens, it’s important that you check your credit reports and contact the credit bureaus if the debt isn’t removed. You should also keep thorough records of all correspondence.
If the collector’s claim is valid, then you’ll have to pay the debt, but you may be able to negotiate a better deal, such as paying only a portion of the debt or arranging a payment plan. Be sure to get any agreement in writing; it should also clearly state that your actions will discharge the debt.
Before making any decisions regarding payment, payment plans or other measures such as bankruptcy, it’s best to consult a professional adviser or lawyer who specializes in consumer debt matters. There are also nonprofit credit counselors who may be able to provide advice.
Being pursued for zombie debt can be stressful. Arming yourself with knowledge of your rights and exercising those rights is your best defence.
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Vawn Himmelsbach is a veteran journalist who covers tech, business, finance and travel. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, CBC News, Yahoo Finance, MSN, CAA Magazine, Travelweek, Explore Magazine and Consumer Reports.
