Statute barred debts and the Limitation Acts

fermi · 1 February 2012 at 4:34PM

It all depends on where they would have to take court action against you.

For example, if the debt was taken out in England, but you now live in Scotland and the debt collector has traced you and is writing to you there, then as National Debtline have previously said.

In this case, if the creditor sues in correct Scottish Sheriff Court then the action would be subject to Prescription and Limitations (Scotland) Act 1973 and debt would have prescribed after 5 years.

If, on the other hand, the last known address that the creditor has is an English one, then it could in theory issue a claim at that address before the six-year Limitations Act period expires.

If such a claim goes unchallenged and a county court judgment is obtained, the creditor could in theory transfer it to a Scottish decree and use it for diligence.

This scenario is, however, reliant on a number of different things all taking place and is relatively unlikely. As you can see, the matter is indeed not a straightforward one.

ThinkingOfLinking · 2 February 2012 at 9:20PM

Thank you for your reply, Fermi. I've written Prove it letters but not had anything back. The truth is: I did have 2 credit cards which were paid in full and showed on my report as satisfied. I moved out of the house at which these cards had been held, in the belief tha the accounts had been closed down (I cut the cards up through the magnetic strips and the chip and sent them back to the companies with a letter asking to close my account now it had been settled....I then find out a few years later that these accounts had been reopened and used to the max in my old address. They should be S.B in 2014...a couple of other frauds have dropped off already and more will drop off this year...

sugarplum10 · 14 February 2012 at 8:37PM

If you read the origional post she states that she cancelled the contract when it came to the end.
So as my pp was wrong am i right in thinking that a CCJ can never become statute barred??
I thought all debt became statute barred after 5 years or is that 6??
grrr justr when i though i knew what i was talking about it turns out that i infact dont!??

fermi · 14 February 2012 at 8:45PM

sugarplum10 wrote: »

So as my pp was wrong am i right in thinking that a CCJ can never become statute barred??
I thought all debt became statute barred after 5 years or is that 6??
grrr justr when i though i knew what i was talking about it turns out that i infact dont!??

The Limitation Act sets a time limit for a creditor to commence legal action. When that time limit runs out, the debt is "statute barred". That is the actual meaning of the term.

If before that the creditor has commenced legal action and obtained a CCJ, the SB rule obviously no longer has any meaning.

sugarplum10 · 14 February 2012 at 9:43PM

fermi wrote: »

The Limitation Act sets a time limit for a creditor to commence legal action. When that time limit runs out, the debt is "statute barred". That is the actual meaning of the term.

If before that the creditor has commenced legal action and obtained a CCJ, the SB rule obviously no longer has any meaning.

thanks this is good to know!
so why dont companies just got straight to a CCJ rather than chase people around and then loose out to the SB rule??
sorry for all the q's im just really interested.
Do they have to try other ways of obtaining the money before they can apply for a CCJ??

fermi · 14 February 2012 at 9:51PM

Because a CCJ costs them fees to issue. These do get added to the amount of debt claimed, but they do have to pay them up front first and then hope that the debtor pays up. if not, then they lose the fees as well as the debt.

For many debts they would just be throwing more money away by trying.

And honestly, most companies are just too damn lazy to bother with CCJs, and it doesn't make commercial sense to try.

They can sell the debt on to a debt collector instead for a guaranteed percentage of the debt and wash their hands of it. That gets money in the bank, and the debts off their books and written off against tax I expect.

Same with debt collectors. They will threaten CCJs from dawn to dusk, but they rarely make commercial sense to go for.

The only real time they are worth it is if the person has substantial assets/equity that could be secured against.

sugarplum10 · 14 February 2012 at 10:21PM

sorry fermi, i have loads of q's.
when something becomes SB am i right in thinking that the money is still owed?? Does it come off your credit file once it is SB or 6 years after that??

fermi · 14 February 2012 at 10:27PM

sugarplum10 wrote: »

sorry fermi, i have loads of q's.
when something becomes SB am i right in thinking that the money is still owed?? Does it come off your credit file once it is SB or 6 years after that??

If you are in England/Wales or NI, then yes it is still owed.

If you are in Scotland it is 5 years, and there the debt is legally "extinguished". i.e. you no longer legally owe it.

SB debts don't come off your file automatically because they are SB.

They come off 6 years from when the default was issued. That can be some time after or before the time the debt is actually SB. So in some cases a SB debt can remain on your credit file for a few months even after it is SB.

sugarplum10 · 15 February 2012 at 1:01AM

Thanks for answering my team of questions I only ask because I'm now a DFW and I am gradually clearing stuff off my file. I'm worried that something I have missed could crop up in say 6 years and damage all my hard work!!

Chris76 · 16 February 2012 at 10:00PM

fermi wrote: »

Letter to use if you live in England or Wales.

Hi, I have a statured barred debt that is about 14 years old and I have not heard anything about it in years I've ignored previous companies who have tried to collect on this debt but I've just had a letter from Ruthbridge Ltd and I've heard they are more aggressive with their tactics so I was going to send your template letter but I noticed at the end you have put a typed name and I was wondering if I should do that? Should I finish the letter with

Yours Fathfully and no typed name or

Yours Faithfully

Mr B Smith

(obviously that's not my surname but I wanted to know if I should type my name at the bottom or not as I've always thought you shouldn't sign and was wondering if I type my name is that an electronic signature?)

Statute barred debts and the Limitation Acts

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