Zombie Debt Collectors
Chapter 7 personal bankruptcy proceedings wipe out all debt – it is considered by law to be dead, gone and uncollectable. "The bankruptcy code says all debts are ended, even if it is not specifically listed in the bankruptcy proceeding documents," says Juntikka. "It's covered; you don't have to pay off old credit cards, or old phone bills, you just don't have to pay it."
That kind of old debt is often called Zombie debt, because scammers just won't let it die. Phony debt collection agencies buy packages of unpaid bills from banks and other creditors. The Zombie debt collectors pay pennies on the dollar; the debt packages then set up telephone boiler operations using cheap internet phone lines. Then they go to work harassing and haranguing people until they finally give in and send them a check. "Bankruptcy clients are perfect victims," says Juntikka. "I see very few smiling bankruptcy clients. They feel guilty, they feel horrible and that's the people these scam artists prey on."
Some people don't know they don't have to pay, some think it's a bill that was overlooked and others just cave in. "A small, but significant percentage are so rattled by the collection action, they pay knowing it is a bankruptcy debt, but they pay just to get the calls to stop," says Juntikka. "They can't take it anymore, it doesn't matter large or small, these guys will only stop calling once you send them money, anything, any amount of money just to get them to stop calling."
Juntikka has been a well-known and highly regarded bankruptcy lawyer in Manhattan for decades. "My clients are not dead beats," he says. "My clients are the salt of the earth; they are as wonderful as these Zombie debt collectors are evil."
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When Juntikka gets a call from a distressed client, he zaps out a letter to the Zombie debt collector telling them to get lost. A responsible professional with an established practice in Manhattan, Juntikka can afford to take the time to do a little pro bono work for former clients.
New regulations and bigger fines could stop Zombie debt collectors, according to Juntikka. "Maybe now that Mr. Obama has taken over, that will happen." Until then, Zombie debtors will continue roaming the country, pulling debts out of the grave and putting the bite on consumers.
Charles Juntikka earned his B.A. at the University of Michigan and his J.D. at the New York Law School.