Zombie debt legislation proposed in the Senate
Image Source: Flickr User Gianluca Ramalho Misiti
We wrote recently about how many creditors allow (or actively encourage) zombie debt to languish on consumer credit reports. "Zombie debt" is old debt discharged as part of a Chapter 7 or Chapter 13 bankruptcy that continues to be reported as past due and owing on credit reports and causes consumer credit scores to be lower than they should. Lower FICO scores can result in being declined for credit, offered costlier credit arrangements or being turned down for a job or housing. A new law would allow consumers to strike back at these often untouchable creditors for damage caused by misreporting.