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Don't let 'zombie debt' come back to haunt you
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As millions of Americans deal with foreclosure on their homes, they need to be aware of a growing phenomenon that's a byproduct of these troubled times - "zombie debt."
Even if you've had debt forgiven through a foreclosure or a "short sale," debt collectors can still try to get you to pay up - even though you have no legal obligation to do so. Like one of those zombies in an old horror movie, "zombie debt" can come back from the dead to haunt you.
"This is a major issue around the country," said a Tampa real estate broker who's a friend of mine. "These collectors try to tell you that you have some sort of moral obligation to pay."
These "zombie debt" collectors have been around for a while in the credit card industry, but with the housing meltdown, they are now seeing an opportunity to go after people who've had a foreclosure or short sale. Since they pay pennies on the dollar for the right to pursue these debts, they profit if they can get just a small percentage of their targets to pay.
Potential targets should know this: You have no legal obligation to pay these debts, and you have no obligation to listen to these people when they call you.
If a collector calls about this type of debt, take down their mailing address and send them a written request to stop communicating with you. Make sure you include a request for a return receipt, and send the letter by certified mail. If that doesn't work, take legal action to stop the harassment.
An interesting story on this topic appeared in May in Houston Chronicle, at http://www.chron.com/disp/story.mpl/business/steffy/5799694.html .
