Akademik

n.

An indebted consumer who is only able to pay the debt interest each month.

Steve Inch, chair of the Scotcash board, said the collaboration — which sees a loan advisor based full time in the offices of North Glasgow Housing Association, also helped avoid the phenomenon of "zombie" loan accounts.

"There's a new term being coined for payday borrowers who are able only to pay the interest on their loans — zombie debtors — so that the principal debt just rolls on, and while there's talk of those institutions having a code of conduct introduced, that's only in the pipeline at present and we want people to know that there is an alternative in the shape of Scotcash," he said.

—Joan McFadden, " Loan service launches attack on the zombies: http://www.heraldscotland.com/news/home-news/loan-service-launches-attack-on-the-zombies.16251849," Herald Scotland, December 30, 2011

It is feared that 3.5m people will turn to payday lenders in the next six months but research shows that nearly two-thirds will regret the decision.

Many will be unable to pay off the loan and risk becoming "zombie debtors", only able to pay off the interest on what they owe.

—Nick Sommerlad, " Church of England ban on payday investments: http://blogs.mirror.co.uk/investigations/2011/12/church-of-england-ban-on-payda.html," Daily Mirror, December 19, 2011

A new group of 'zombie' debtors — who currently pay only the interest charges on their debt and not the debt itself — has also been identified by R3's research. One in six individuals are only able to pay the interest on their debt rather than paying off the debt itself.

—" 3.5 million reach for payday loans as 'zombie' debtors rise: http://www.r3.org.uk/index.cfm?page=1114&element=14982&refpage=1008," R3: Association of Business Recovery Professionals, December 7, 2011

Here's an earlier citation that refers to an indebted U.S. citizen who can't declare bankruptcy because he doesn't qualify for either Chapter 7 (liquidation of assets to pay creditors) or Chapter 13 (consolidation of debts):

Legions of consumers would shuffle through the marketplace dragging the leg irons of mandatory Chapter 13. Some consumers would become zombie debtors, unable to qualify for either Chapter 7 or 13.

—Steve France, " Big Brother Bankruptcy: http://pqasb.pqarchiver.com/washingtonpost/access/51336423.html?dids=51336423:51336423&FMT=ABS&FMTS=ABS:FT" (payment req'd), The Washington Post, March 21, 2000