Statute barring - can it be undone?

[thedirtyhound]

I understand the concept of a debt being statute barred, notwithstanding that when it comes to CCA matters there is a bit of confusion these days as to whether the clock starts from the date of the last payment or the date that the lender decides to default you. That seems to be a bit of luck of the draw as to which DJ you get on the day if it should go to court. I have an old disputed debt that is definitely stature barred because the lender terminated the account well over six years ago. I had legal demands from their own in house lawyers before the alleged debt was sold on. That hasn't stopped the DPC from writing to me as though I still owe it. Obviously, I am not going to respond to them, but I thought it was worth asking the question as to whether a careless comment could actually undo a debt being statute barred? If, for instance, you told them ten years down the line that you did actually owe it, would that be enough to start the clock ticking again for another six years? Obviously, I would welcome any comments on this, but I am particularly interested to hear what the professionals have to say about it.

[lawboy65]

Statute barred debts -DRO Unit Guidance

This issue of statue barred debts is not at all straight forward and limitation on debt is a complex area of law, however advice has been obtained regarding whether statute barred debts need to be scheduled in a DRO application.

Section 251B of the Insolvency Act 1986 states the following:

251B Making of application

(2) The application must include—

(a) a list of the debts to which the debtor is subject at the date of the application, specifying the amount of each debt (including any interest, penalty or other sum that has become payable in relation to that debt on or before that date) and the creditor to whom it is owed;

However, Section 251A (2) (a) of the IA 1986 states that a qualifying debt means a debt that is for a liquidated sum payable immediately or at some certain future time.

If a debt is indeed statute barred then it is neither "payable immediately or at some certain future time".

Firstly to clarify, limitation on debts does differ, all contract claims (and therefore most debts) are barred after six years but claims under deed (i.e. mortgage loan debts) are barred after 12 years. To add to the difficulty if a debt is acknowledged then limitation starts to run (again).

In simple terms money could be lent in 2012 which the debtor agrees to pay over three years. They fall behind with payments, but in 2014 agree they still owe the money. Limitation on this debt is six years from 2014, not 2012.

It is correct to say that limitation, effectively, does not apply against a debt upon which judgment has been obtained. If the creditor has previously taken a debtor to court and have obtained a County Court Judgment, the debtor will be unable to use the Limitations Act 1980 to dispute the debt. If the judgment is over 6 years old the creditor may need the permission of the Court to enforce the debt.

It is also correct that a ‘debt’ exists beyond limitation but the creditor can lose any right to enforce the debt by virtue of limitation.

Due to the uncertainty of limitation, the first principle must be that all unpaid debts should be listed in the application for a DRO; this is so even if the debtor considers that they may be able to rely upon a defence of limitation against enforcement of that debt. Only where, prior to the DRO application being submitted, limitation has been independently established and the debtor has an acknowledgment or certainty that the debt was statute-barred prior to the date of the application then the debt should not be listed.

Where the official receiver subsequently discovers that a debt was not statute-barred and, as a consequence, at the date of the DRO application the debts exceeded £15,000 the DRO will be revoked.

As limitation on debts can be such an uncertain process the rule of thumb should be if in doubt, list it.

[Amethyst]

But basically, No, once a debt is statute barred, it cannot be 'un' statute barred. So long as there has been a clear 6 years in between acknowledgement/payment ( or in CCA debts, default date or later payment/acknowledgment )

a right of action, once barred by this Act, shall not be revived by any subsequent acknowledgment or payment.