Senate Democrats Propose "Zombie debt" bill
Sharon Edmondson, Washington Legislative Team Member | July 17, 2015
Senate Democrats introduced a bill that would erase debts that continue to linger on consumers’ credit after they have been extinguished through bankruptcy.
The proposed bill (view here) would amend bankruptcy law by requiring banks and debt buyers to flag so called “zombie debts” with credit reporting agencies so they can be zeroed out in a borrower’s file. The Justice Department is investigating some banks over the issue and the Consumer Financial Protection Bureau recently fined JPMorgan Chase for allegedly selling some zombie credit-card debt borrowers no longer owed.