Sometimes our clients have got a debt consolidation loan and have paid out their debts but haven’t closed the accounts. These accounts start to accrue fees and charges, mainly through having direct debits dishonouring repeatedly on these accounts.  With no payments penalty interest rates kick in and the balance of the zombie debt grows.

The second way zombie debts occur is when a creditor might sell, or “charge off” its overdue debts to a debt collector who starts fresh collection activity.  This might happen years after you thought it was dead and gone.  Suddenly 10 years latter you’re getting calls, letters and legal action.

There is a statute of limitations on debt of 6 years. So if you haven’t heard from your creditors for 6 CONTINUOUS years, the debts is gone.  However if you didn’t update your contact details with that creditor, the statute of limitations doesn’t apply.  The statute of limitations is 12 years if the creditors have successfully obtained a judgment for the debt.

Zombie debts don’t go away unless you pay them. Just like zombies keep coming back to life in horror films, to make sure they’re dead, CLOSE THE ACCOUNTS!