Nephew

lovestoomuch

My nephew, aged 28, has a debt of approximately £500 which he incurred four years ago when he was living away from home but has now moved back He has been told that if the debt is not claimed within five years from the purchase date he does not have to repay it. The debt has now been passed on to a Debt Collection agency and they are trying to contact him. My sister has started getting phone calls from the Debt Collectors but my nephew has told her to deny that he lives with her. Can you please tell me if his information is correct as my sister is unable to pay it and is very worried as to the effect this will have on the credit rating of her home address and also his future prospects as to mortgages etc?

GeorgeUK

This will depend on whether the debt is governed by Scots law or English law. If no payment is made towards a debt for a period of 6 years (5 in Scotland) and there is no acknowledgement of the debt in writing, then it may be statute barred. It may however depend on what the debt was for.

As the debt is not your sisters, she will not be required to pay for it and debt is no longer associated with the address, but with the individual.
(Taken from the experian website)

Will my son or daughter’s debt affect mine and my husband’s credit rating?

Credit reports are produced on people not addresses, and people's credit reports are only linked when they apply for joint credit facilities or act as guarantors for one another. So unless you and your husband have entered into that sort of financial arrangement with your son or daughter, any debts they have run up won't affect your creditworthiness, whether or not these debts are registered at your address.

Edit: As to his future prospects, as long as there is no CCJ (or decree) then after 6 years, this will disppear from his credit file. If there is a default, then this will stay for 6 years from the date it was issued. After this time your nephew will need to rebuild his credit rating - making sure that he makes all payments on time and eventually he will have enough of a credit history to get credit or a mortgage.

I would NOT advise him to try to get a copy of his credit report until after the debt has become statute barred. When you request your credit report, your address is updated on the system and DCA's can then see this change to your address and will try to contact you.