debt questions

japanesegirl

sorry to be thick but I dont know what you mean - please explain. Are you saying that after 6 years ALL debts potentiall can be written off or are cancelled.

We have just gone into a DMP with CCCS and picked up somewhere that we maybe able to get our creditors to 'write-off' the debts after a number of years. We have received 2 default notices out of our 9 creditors.

sportbeth

Hi Japanesegirl,

Not quite, the way that it works is that if you have a debt that you haven't had any contact on for 6 years, i.e. you haven't contacted a Debt collector or made a payment on it, then the debt becomes statute barred and legally no-one can chase you for it. As soon as you do admit the debt though, i.e. by making a payment, the 6 year clock starts ticking again

So in my case there is one old storecard which apparently shows on my credit file, I have no idea what it was for and who it is with. It's about 5 years old and no-one has contacted me about it.

If by the 6 year mark of the default being registered there has still been no contact, it will drop off my file and legally I have no obligation to pay it. Also no-one can take me to court for it.

It is very rare for a creditor not to chase you though and it's not recommended to hide for 6 years as it won't work!! But if you did have one that fell through the cracks like mine did, then you could just let it go.

The debate is whether or not that is morally acceptable though., Some people see it as "debt avoidance" and think people should pay up no matter what. In my case I will as I'm trying to find out who's it is and who I pay to to get it off my record, but if I wasn't after a mortgage I would have been inclined to support a different view.

Broken_hearted

sportbeth wrote:

Yes, morally you have an obligation to pay it. But also morally you have no obligation. The company has written it off, I do believe that any company worth their salt would have factored into their margins a percentage of annual loss and you are it.

True it just means everyone pay more for those who don't pay.

sportbeth

How so exactly?

sportbeth

oddone wrote:

If you have a debt that is 5 years old. Is it better to wait for it to pass the limitations thing or pay it and have that default on your account for the next 6 years? Any comments?[/QUOTE

By the way - the default will only stay on until the 6th anniversary of the default date. So if it passes the statute barred time it will drop off your credit file

oddone

I totally agree that I should pay it off and my head has been buried on the sand while I have been abroad. I just wasn't sure whether that would hurt my credit report more than letting it fall off.