Phantom debt or zombie debt is a debt that is old, defaulted, or not owed and is somehow still being pursued for collection to be paid by the presumed debtor. It generally refers to debt that is more than 3 years old, is long forgotten about or belonged to someone else – like someone with the same name or a deceased parent. The amount owed can grow to hundreds or thousands of dollars more than what was originally owed. A great example of this is from George Lovelock. George missed an 11 cent Verizon bill and seven years later it had grown to $4,000.00.[1]

Sometimes it was never owed, was owed by a deceased parent, or that was previously owed by the presumed debtor, but was previously paid in full, settled, discharged via bankruptcy or a dismissed court case, is beyond the statute of limitations, or is otherwise not legally collectible, but that a collection agency or other similar service is aggressively attempting to collect, often fraudulently.[2]

While the concept of phantom debt is quite old, it has gotten a lot of attention since the 1990s.[3]

Very often, collectors of phantom debt use intimidating, abusive, or otherwise illegal tactics in an attempt to collect phantom debt that include frequent phone calls, calls to the victim's place of employment, or threats of scary consequences against the victim that sometimes include arrest and/or criminal prosecution. In the United States, such tactics violate the Fair Debt Collection Practices Act.[2]

Sometimes, the source of phantom debt is from collectors who buy the debt from other collectors for pennies on the dollar, then take action that is not always legal in order to collect it. Techniques used include suing or threatening to sue, reaging it on the victim's credit report, or promising to remove a negative credit mark in exchange for a partial payment. When the latter occurs, the agency will often not follow through, and will re-sell the debt to another similar agency that will engage in the same practices.[4]


  1. ^ "Zombie Debt: The Bills That Won't Die". Retrieved 10 December 2012.
  2. ^ a b "I-Team: Beware Of Predatory Debt Collectors". WBAL Baltimore. 2009-09-15. Archived from the original on February 18, 2012. Retrieved 2011-03-26.
  3. ^ Fontinelle, Amy (2008-10-31). "Beware Of Zombie Debt Collectors". Retrieved 2011-03-26.
  4. ^ "'Zombie' debt is hard to kill". MSN Money. 2006-07-24. Archived from the original on 2011-02-13. Retrieved 2011-03-26.
  5. ^,for%20pennies%20on%20the%20dollar. debt-scavengers-zombie-debt