Zombie debts are defined as debts attempted to be collected in which the statue of limitations has passed.
The introduced bill chose to use this definition because these debts appear when presumably they should be dead.
The bill after references to the House Banking and Insurance Committee and Judiciary Committee prohibits the collection of or the attempt to collect from the consumer, all or any part of a debt if:
-The statute of limitations has expired
-The debt is no longer owned by the original obligee or successor by merger or acquisition
-The debt has been sold or otherwise transferred by the original obligee to a debt collector
-The debtor has made no payment for at least ten years
Delegate Mark Hunt said that the limit of 10 years was included because it is already the standard with contracts.
“After that 10 year statute of limitations I can no longer be sued on that contract,” Hunt said. “That’s the outward limit that a person’s going to have to the ability to file some type of legal proceeding.”
The proposed legislation would reiterate this point so consequently H.B. 4360 can be considered a double-tap on zombie debts.
The bill will be up for a vote by the full chamber Wednesday.