Myth-busting: What is zombie debt?

At Lowell, we understand that when it comes to trying to educate yourselves on all the different terminology used online relating to debt that it can become quite confusing. That’s why our goal is to make things as simple as possible for our customers.

To help, we’ve created this myth-busting guide to delve into everything you need to know about ‘zombie debt’ including what it means, the truth about zombie debt collectors, and whether Lowell deal with zombie debt.

What is zombie debt?

In short, ‘zombie debt’ is a term sometimes used online to refer to debt that has already been written off.  

There are various situations which can be seen as falling into the category of ‘zombie debt’ including:

  • Statute-barred debt – Most debts in England become statute barred after a limitation period of six years. You can read our guide on statute barred debt for more information about this.
  • Debt that doesn’t belong to you – There are rare occasions when you might be contacted about a debt that you’re not liable for. Whilst rare, this may be an accidental error or could be a more serious situation involving identity theft. To find out more about this, we have already written about how to recognise if a debt’s yours.
  • Settled debt – This is when you have already agreed on and finalised a settlement offer with your creditor meaning that the creditors have agreed to ‘write off’ the rest of the debt. You can find out more about this on National Debtline.
  • Mutual agreement – There may also be other scenarios where your debt has been written off as a mutual agreement between yourselves and the creditor such as following a dispute or complaint.

What are zombie debt collectors?

You may have come across some financial sites referring to debt-purchasing companies like Lowell as ‘zombie debt collectors.’ They say that this is because these companies have purchased your outstanding debt from other creditors.  

However, just because your debt has been purchased by another company doesn’t make it ‘zombie debt’. This just means that you no longer owe the debt to your original creditor, and the new company is now the legal owner of your debt.

If you’re interested in finding out more about the process, you can check out our guide on how debt purchasing works.

How can I deal with zombie debt? Can I ignore it?

It’s important to not ignore your debt collector, even if you think you’re being contacted about zombie debt as this could make things more complicated later on. If a debt does belong to you and is still payable, then the next step would be to set up a payment plan with your creditor and to begin making payments.

Even if you’re certain that you have no outstanding debt, it’s important that you contact your to see why they’re contacting you or find out more information about the debt.

Its important to note that you can get additional debt support and advice from other independent organisations such as Citizens Advice and StepChange. These organisations will be able to help you understand your options and advise you further on a debt that you may have been contacted about.

Is Lowell a zombie debt collector?

No, Lowell isn’t a ‘zombie debt’ collection agency, we purchase debts from other companies. As we mentioned before, it’s normal, and legal, for your debts to be sold or ‘assigned’ to another debt collection or debt purchasing company, like ourselves.

During the debt purchasing process, we make sure that we have all the relevant and necessary information from your original creditor and that it is accurate. This is so we can check the status of your debt and get in touch with you to help you become debt-free with Lowell.

We don’t collect debt on behalf of anyone else. Our guide on how to create a budget and manage your money includes lots of tips and information that will help you work towards clearing your outstanding balance with us.

Our customers come first, and we want to make the entire debt process as easy and simple as possible for you. If you’re ever unsure about anything to do with your debt with us, we’re always here to listen and see what we can do to help.

What should I do if I’m contacted by Lowell?

We completely understand that there are times when you might not even be aware of a debt in your name. If you’re feeling overwhelmed or nervous about taking the first step to clearing your debt, please do get in touch with us so we can work together to figure out the best next steps for you. Our friendly team are there to listen and trained to be considerate of your personal circumstances.

We’re here to support and work with our customers so once you’ve let us know about a debt you’re unsure of then we’ll do our part to help give you all the information you need. And if you do think there’s a mistake or you have any other concerns or questions then our team will be more than happy to look into that for you as well.

How you can work towards becoming debt-free with Lowell

After purchasing your debt, we’ll be in touch to let you know about this change of ownership. From there, we’ll look to understand your circumstances and agree a solution that is entirely based on your own personal circumstances using our budget calculator tool.

Your payment plan with us is totally in your control. You can decide how frequently you want to pay, the payment method, and the start date of when your plan begins. You can also easily manage your payment plan via our online portal or by contacting us directly.

At Lowell, we believe it’s important to help educate our customers about financial issues and create an honest conversation that is completely non-judgemental. So, we hope that this blog is useful and that you feel confident when it comes to understanding the truth about zombie debt.

If you do have any other concerns or questions, then please get in touch with our friendly and supportive team who will be able to help. You can also check out our debt guidance hub and the Lowell blog for other useful financial guides and more information about how Lowell can work with you.

Published by Stephanie North-Shaw on 15/03/2023

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