zombie-debt

If you get a call from a debt collector for a loan you never took out, and your Social Security number starts with a zero, try this excuse: "[My SSN] ended up linked to a Micronesian man who defaulted on a disaster loan from the U.S. Small Business Administration."  More »

The Better Business Bureau has released a warning to be aware of scammers calling to threaten people with arrest "within the hour" for defaulting on payday loans. What makes them stand out from normal debt collecting scammers is these callers have huge amounts of personal info on their victims, including Social Security and drivers license numbers; old bank account numbers; names of employers, relatives, and friends; and home addresses.  More »

The three big credit reporting agencies—Experian, TransUnion, and Equifax—have been inaccurately reporting debts on millions of consumers' credit reports even after the debts have been forgiven during bankruptcy filings. Once forgiven, the debts are supposed to be removed from credit reports, but the agencies are continuing to report them as active. They have until October 1st to comply with Judge David O. Carter's order to "revamp their systems," writes Jane J. Kim on the Wall Street Journal's finance blog. Now if you're in debt trouble, you can look forward (?) to having either unpaid debts on your credit report, or a bankruptcy filing, but hopefully no longer both at the same time.  More »

The Chicago Tribune writes that "More than 119,000 civil lawsuits against alleged debtors are clogging [Chicago] courtrooms," but since collection agencies make money off of volume business, the suits filed are based on too little information. The result: cases based on mistaken identities, or for debts already settled, or against debtors who have made good-faith efforts to work out repayment plans. "The system is out of control," one attorney tells the paper.   More »

It seems that some bottom-feeding debt collection companies—the ones who buy old debts that are frequently beyond the point where you can be sued for collection (what the FTC calls "time-barred debts")—purchase old debts, mark them up with incredibly high penalties and fees, then "forgive" them and write them off as tax losses and send the debtors 1099-C forms—which means you have to pay taxes on the forgiven amount. If this happens to you, here are a few things you should consider first.  More »