There’s been a lot in the news lately about zombie debt. This is debt you thought was dead or no longer owed, but out of the blue, it comes back to haunt you. The name conjures images from movies like Night of the Living Dead, and like a good monster flick, the debt itself is pretty scary. It’s a confusing issue predators use to overwhelm and confuse those who aren’t aware of the facts, and bury consumers with harassing phone calls and letters. To help readers understand their rights, here are some brief answers to many of the FAQs we receive, along with traps to avoid and resources to help.

• What is zombie debt? — Zombie debt is old debt sold at a significant discount to companies who will then try to collect on In fact, an old debt may have been sold and resold four or five times over several years.

• How do I know if I really owe it? — Ask the collector to prove the debt is ow The Fair Debt Collection Practices Act (FDCPA) gives us the right to require them to verify we owe the debt. By not disputing their claims within 30 days of the initial contact, the assumption is the debt is valid. Before answering any questions, send a certified letter (one verifying the date of your inquiry) requesting the collector prove the debt is actually owed. Here’s a sample debt validation letter.

• What if they can’t prove I owe the debt? — Since these debts have been sold and resold sometimes for years, there may no longer be any supporting documentation proving the debts are If so, they must drop their claim.

Caution: Many scams artists are using this zombie trend to collect phantom debts — debts they make up but that don’t actually exist. Asking for validation typically stops the menacing phone calls or threatening letters, and they move on to other unsuspecting victims.

• What’s the statute of limitations on old debts? — It varies by s See the credit card statute of limitations by state. The time limits given in this chart will generally apply to all “written contracts” or “open accounts.” For instance, in Maryland, it’s only three years, but West Virginia is ten. Once this date has passed, collectors can no longer seek payment. This, however, does not prevent them from reporting the debt to one of the credit reporting agencies.

Caution: Be aware that moving to a different state — even for a short time — can lengthen the time debt collectors have to demand payment.

• What if I just agree to make a small payment to stop the harassing phone calls? — Any acknowledgement of the debt, agreement to pay, or sometimes even admitting the debt is owed after the statue of limitations expires could potentially restart the Creditors have the right to sue for payment from the date a good faith payment was made.

• How can it affect my credit score? — Any unpaid debts, if reported to a credit reporting agency, have the potential to remain on our credit score for up to seven years, no matter whether the debt was settled, ignored, or forgiven.

Caution: The myth that debts can never be revived after they’ve been removed from a credit report is incorrect. We’re actually talking about two separate issues here: the ability to collect a debt (regardless of whether it was ever reported to a credit agency), and how long it stays on our credit history. As long as the statute of limitations hasn’t expired, collectors can continue to try to force payment of an old debt, but after the initial seven-year clock, debts are removed from our credit history.

• Can a debt collector contact me any time? — No. According to the Federal Trade Commission (FTC), a debt collector may not contact you before eight in the morning or after nine at night, or at other inconvenient times or places, unless you agree to Collectors cannot contact anyone at work once they’re told (orally or in writing) calls are not allowed.

• How will this debt affect my taxes? — If any of the past debt is forgiven (the total owed minus the amount actually paid), the lender or business can send a 1099-C [PDF] (Cancellation of Debt) showing the amount discharged (forgiven). The recipient will then be required to pay taxes on this bal There are several exceptions to this rule: (1) A discharge of debts listed in Chapter 11 bankruptcy; and (2) Mortgage debt involved in foreclosure, short sales, or restructuring from 2007 through 2013 covered under the Mortgage Forgiveness Debt Relief Act of 2007.

Caution: Debt collectors may threaten to file a 1099-C if the old debt isn’t paid. Unless they can validate the date with the statute of limitations, they are not allowed to submit a 1099-C. If you receive one in error, be sure to let the IRS know about it. Forbes reported the tax courts consistently supported the taxpayer when erroneous 1099-Cs were filed last year.

• Should I be concerned about zombie debt after a foreclosure? — According to RealtyTrac, millions of homeowners relinquished their homes to foreclosure, but the title never transferred to the bank or the new owner. Now, up to seven years later, these homeowners realize they are still on the hook for property taxes, homeowner association dues, and other possible assessments or fees during the intervening years.

Caution: For those going through foreclosure, make sure any second mortgage holder releases the lien. Otherwise, the lender can sue for payment (depending on the state laws) or sell the second mortgage to a debt collector even though the homeowner no longer occupies the home.

On a positive note, New York-based nonprofit Rolling Jubilee, an offshoot of the Occupy Wall Street movement, is in the process of purchasing millions of dollars in zombie debt, not to try to collect these debts, but to pay them off. Many are healthcare debts seniors are unable to pay.

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