Thomas R. Breeden, P.C. Attorney At Law
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Successful Defense in a Zombie Debt Buyer Case

We had another happy client, defending him from a zombie debt buyer.

Back in 2007, the client lost his home to foreclosure. At the time, he had a second mortgage on his home which he also defaulted on. Years went by, and he heard nothing from the second mortgage company. He was able to rebuild his life and get another house. In Virginia, the statute of limitations, or time frame within which a lawsuit can be brought to collect a written debt is 5 years from the date of breach. So by the end of 2012, any rights that the second mortgage company had to come after the debt died a peaceful death. Unfortunately, there are companies out there who like to resurrect the dead debts - they are known in the industry as zombie debt buyers because of that practice. 

They will buy these dead debts for pennies on the dollar, and then try to force and scare the customer into paying on these debts. If the customer makes even one payment, there is an argument that this revives the ability to collect the debt, thus bringing the debt back to life. Unfortunately, merely sending letters trying to convince the customer to pay on the old debt, in and of itself, is not usually prohibited. Sometimes the zombie maker will take the next step of actually suing on the dead debt. This will often scare the customer into paying the debt, or just giving up and letting a judgment be taken for the debt, assuming that there is nothing they can do or that it will be too expensive to hire an attorney to fight the lawsuit. That is a bad assumption. An aggressive legal defense will often be successful in these situations, as was the case here.

In our case, the debt died in 2012. In 2017, a debt buyer purchased the dead debt and sent letters trying to collect on it. Luckily, the customer ignored these letters and did not pay. The debt buyer then filed a lawsuit for $80,000!

Instead of rolling over, the customer hired my office. When the debt buyer was not willing to back down, we brought the facts to the Court's attention, and filed a Plea in Bar - a motion saying that the statute of limitations had run on the debt and it could not be pursued. Ultimately, the Court agreed with us and dismissed the lawsuit.

Phase 1 is now complete. The next phase will be our lawsuit against the debt buyer for violating the Fair Debt Collection Practices Act, and seeking both damages and an injunction to prevent them from continuing this deceptive practice.

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