Debt collectors are supposed to adequately review all relevant information when pursuing legal action against consumers. This is supposed to prevent collectors from filing lawsuits for debt that is outside the statute of limitations or that has already been paid off. The Financial Protection Bureau should be making things even easier for people in Pennsylvania, but new rules could mean even more attempts at collecting so-called zombie credit card debt.
A zombie debt is one that has already been paid off but a collection agency is trying to collect payment on anyway. Back in May 2019, the CFPB proposed a new debt-collection rule that would make it even easier for collection agencies to pursue those zombie debts. The new rule would allow those agencies to take legal action against consumers without really checking to make sure that a debt is not past the statute of limitations or already paid off.
Considering that 71 million people in America are currently dealing with debt collection efforts, this is a serious problem. Many of these collection efforts could involve zombie debts. In 2018, the CFPB and the Federal Trade Commission received 620,800 complaints about debt collection regarding either zombie debts or debts that consumers were mistakenly accused of incurring.
Paying off credit card debt is a huge accomplishment that a person living in Pennsylvania should be extremely proud of. However, to have to face that debt months or even years down the road can be devastating. When debt collection agencies refuse to acknowledge zombie debts and pursue legal action — such as wage garnishment — bankruptcy can be an effective solution to this problem.