Old debt

[Slinky46]

Hi all.. Its been a while..

Wondering if anyone can offer advice on debt?

In a nutshell, around 6yrs ago, following a split with my partner I realised a wouldn't be able to keep up payments on various credit cards and loans.

I went down the 'head-in-the-sand' route and simply ignored the problem.

I haven't made any payments in nearly 6yrs, the letters and phone calls stopped quite some time ago.

While I know my credit report is in tatters, what happens now?

Am I off the hook so to speak or will this never go away?

Thanks in advance people.

[natweststaffmember]

Re: Old debt

BUMP as I think it is statute barred but not 100% certain that it is.

[Curlyben]

Re: Old debt

Dates are extremely important.

You say

around 6yrs ago

and

in nearly 6yrs

If a lender allows time to pass without receiving any payment an action for recovery may become barred.

Under the Limitations Act 1980 the time limits are

* in simple contracts (credit cards, loans, etc.), 6 years
* in contracts under seal (mortgages), 12 years.

If the debtor acknowledges the debt in writing or makes a part payment within the original limitation period, then the time limits start to run again from the date of acknowledgement or the date of payment.

Even though the lender may be barred from pursuing recovery, a debtor may decide to pay the debt after the expiry of the time limits. Because of this you should allow a debt which is otherwise statute-barred if the personal representatives pay the debt and you receive evidence that the payment has been made.

The above instructions do not apply to debts in Scotland. Under Scottish law, if a lender allows time to pass without receiving any payment an action for recovery may become barred under the Prescription and Limitation (Scotland) Act 1973. (For details of this Act see Gloag and Henderson 10th edition at Chapter 15.). These debts are completely extinguished and cannot be enforced. Once the prescriptive period expires the debt cannot be allowed as a deduction.

To sum up, basically once a debt becomes statute barred it is up to the debtor whether or not they wish to pay the debt. A debt can not become unstatute barred.

[Slinky46]

Re: Old debt

Hmmm.. So basically the requests for income/expenditure forms to be returned or token payments would have 're-set' the clock, so to speak?

It will be 6yrs at Christmas.. Interesting..

Can I have these removed from my credit report after this time has lapsed?

The advice is really appreciated, once again you come up trumps.. Thanks.

[Happyolddog]

Re: Old debt

I haven't made any payments in nearly 6yrs, the letters and phone calls stopped quite some time ago.

This is the date you need to look at for the six year rule under the Limitations Act 1980.
I am not positive, I guess I will be put right on this but I think the rule comes into force when corrispondence has ceased, so if in the six years they have contacted you, then from the last date of contact if six years has elapsed then the debt is ruled as spent.

[Curlyben]

Re: Old debt

The clock starts from the last acknowledgement of the debt, in writing or by payment.
So letters/calls from DCA's chasing payment are meaningless unless the debt was acknowledged by the debtor.

Some DCA's, Cabot, claim that this is the date of the default notice, well they're incorrect in this assumption. After all the default notice tends to be sent some months after the last acknowledgement of a debt.

Hope that makes sense.

Here's a good read on Statute Barred debts: Statute Barred Debt - A guide and letters to use. - Legal Beagles

[Slinky46]

Re: Old debt

Thanks again for the information.. I have read the letter templates and will use them if needs be..

I'd just like to add to any casual reader of this thread that I wouldn't advise going down the same financial path that I've followed. When I took the debt on I did so with good intentions, circumstances changed for the worse and dictated the outcome.

It is good to know where I stand legally though. I appreciate it.

[Jelly]

Re: Old debt

Were any of these loans Student Loans? If so, what year did you start your course?

[Slinky46]

Re: Old debt

No Jelly, They weren't student loans..

[Jelly]

Re: Old debt

Just wanted to check as newer style loans are 12 years, not 6 years in the statute of limitations.

Acknowledging the debt in writing (including income/expenditure forms) will indeed have reset the clock.

[Slinky46]

Re: Old debt

It seems to me that the requests for income/expenditure forms or token payments are purely to avoid the debt becoming statute barred. Or am I just overly suspicious?

Does anyone know if a charging order has time limitations? Or does it stand until either the property is sold or the order enforced? Its just that I've had requests for token payments since the order was put in place around 4yrs ago.