The Expert Podcast

Today we're going to talk about zombie debts. What is a zombie debt? It could be a mortgage, it could be a judgment, it could be a lawsuit. It's something that was a debt against you that you thought was long gone. Could be a car loan that maybe you had many, many years ago, maybe it was in collection, maybe it was a charge off, maybe it was a judgment that you thought was gone.

The one key thing, the one common element that we hear when we hear about these zombie debts is, "I haven't heard anything for so long. For 5 years, 7 years, 10 years, nobody called me, nobody tried to collect, nobody tried to take my house, take my car." And then all of a sudden, you either get a phone call or you try to get credit or buy something, and you find out that that zombie debt is still out there.

This article in Yahoo Finance is about a woman who had a mortgage on a property, a second mortgage from a long time ago that she thought was forgiven. And all of a sudden, you get a debt collector trying to bang on your door to try to get money from you. How does that work? Well, the way it works is if you have a debt, unless the debt is very formally released (not forgiven, not charged off, released), that debt still has the risk of being collected.

Now remember, we're not attorneys, we're not giving you legal advice. We're a licensed private investigator and a certified civil court mediator, so we do see these cases all the time. What happens is the original lender, let's say it's a major bank like Chase Bank or Wells Fargo, once they realize they're not going to get the regular payments from you that they're supposed to, they will sell that debt for pennies on the dollar to a debt collector or collection agency. They have to write it off their books at the original lender, so the original lender, it's off their books.

Now the debt collector, they can buy it for basically nothing. They can sit on it for a number of years. It didn't cost them that much. If the debt was $100,000, they might have paid $200 for the debt. They can sit on it for as long as they want, and then all of a sudden, they can come back and say, "Now we're going to start trying to get the money." It's all pure profit for them because it cost them basically nothing to buy it. And because of the fact that that debt is still recorded somewhere, on the property deed, in the land records, against a car title, in a judgment in a civil court record, it's now valid for them to collect.

So what you want to do is if you have a debt that's out there, you want to request a lien release or judgment release or a mortgage release from the original lender, not from the debt collector. Because the debt collector may or may not be able to legally sign a release, because their name is not on the original debt. They're just like a vendor.

And the way to do that is very important. You want to do it formally, in writing, using a very specific type of lien release package. And you can click our link below for lienrelease.com, which gives you instructions on how to do it. You don't want to do it by phone, you don't want to call up the lender and say, "Hey, can you get me a lien release?" You don't want to text message them or email them because it won't work.

You have to do it in writing. And the other thing we recommend is when you send that in writing, don't just send it to one place, send it to four or five different locations for that lien holder, even if it's a judgment creditor, somebody from a lawsuit that has a judgment against you. Find their registered agent in their corporation, find an alternate authorized signer, send it to them. Many times, they'll just sign it and send it back.

Now, if they won't, now you have proof that you at least tried to contact them. So you may be able to now take it and file a court order to have it removed because they're not taking action. Again, get good legal advice for any of these things.

But if you do have a zombie lien or zombie loan or zombie mortgage, do take some steps, make some effort to try to get it released and removed. Just make sure you're not going to do anything that causes more harm or damage, like makes you owe more money or does something to threaten anybody or intimidate somebody. Do it the right way.

Thank you for watching another episode of Actual Human Advisory on Describ TV. Remember, we have live one-on-one consultation appointments available at actualhuman.com, where you can book a one-on-one, undivided attention live call with a licensed investigator, a licensed insurance broker, a licensed mortgage broker, real estate broker. I'm also a certified real estate title examiner, a certified civil court mediator, along with having developed and started over 15 businesses, several of which were sold for millions of dollars.

So, if you do have questions in any of those categories, you can arrange a one-on-one live video consultation. Use the link below, and we'll see you on the next video.