Protect Washington’s Families
from Zombie Debt
Like a zombie coming back from the dead, old debt comes back
to haunt consumers. Zombie debt (also known as time-barred
debt) occurs when companies sell their old debts for pennies on the
dollar to third-party debt buyers. Debt buyers then try to collect
on old debts or debts that have already been paid (and
sometimes never even owed in the first place). Once a consumer
makes a partial payment, the clock restarts on the statute of
limitations. The burden of proof lands on consumers, many of whom
do not have documentation to prove that the debt is not owed
anymore or that they never owed it.
Debt buyers often have inaccurate information.
When debt buyers purchase debt, they rarely purchase
documentation and proof of the debt. Instead, they get a
spreadsheet that lists basic information, like a consumer’s name
and last-known address, amount allegedly owed, and date and
amount of last payment. This information may be years old and no
longer accurate. The credit card company makes no guarantees as
to the accuracy of the amount owed or whether the debts are
even collectable.
Debt buyers are flooding our court systems.
Debt buyers are increasingly taking advantage of overwhelmed
state courts and loopholes in the law by filing lawsuits to collect on
the debt they purchase. Debt buyer cases typically result in
default judgments, meaning that consumers are not appearing in
court to defend against the suits. This is often because consumers
aren’t getting notice of the suits, they might not know why they are
being sued, or they lack representation. Many consumers first
learn that there is a judgment against them when wages are
garnished, property is seized, or bank accounts are seized.
Low- and moderate-income consumers are disproportionately
affected. One study found that 91% of people sued and 95% of
people with default judgments entered against them lived in lowand moderate-income communities.¹ At a time when struggling
families need every penny to survive, zombie debt is threatening
Washingtonians’ well-being and economic security.
As a result of a divorce from an abusive
husband, I went from a two person income
down to one. I ended up deeply in debt and
had to file for a Chapter 11 bankruptcy.
All my debts included in the bankruptcy
were no longer collectable, but debt
collectors kept calling me trying to collect on
the old debt. I would tell them that I filed for
bankruptcy and I didn’t owe this money
anymore, but they would still call. Then
three months later, a different agency would
call for the same debt. It wouldn’t stop!
This harassment by debt collectors happened
for over a year and a half. I was harassed
by three different creditors that I didn’t even
owe money to. I just wanted to put the
whole mess behind me, for myself and my
two children, but I couldn’t.
My hope is that we can start to hold
creditors accountable. They hold us
accountable for our debt. I am doing the
right thing. So should they.
-Sally
Bellevue, WA
Policy Recommendations
Ensure that debt buyers can provide proof the debt is owed, that the amount is accurate, and that the
buyer actually owns the debt
 Ensure that debt buyers can not sue on debt beyond the statute of limitations
 Require debt buyers to give advance notice of legal actions and comply with the laws that are already in
place

1501 N. 45th Street, Seattle, WA 98103  206-694-6794  www.povertyaction.org
Opeiu8/afl-cio
1 Neighborhood Econ. Dev. Advocacy Project et al., Debt Deception: How Debt Buyers Abuse the System to
Prey on Lower-Income New Yorkers 10-11 (2010), available at http://www.nedap.org/pressroom/
documents/DEBT_DECEPTION_FINAL_WEB.pdf.
1501 N. 45th Street, Seattle, WA 98103  206-694-6794  www.povertyaction.org