debt worry/interest on account- ADVICE NEEDED

el_matty

just registered with this website as i desperately need advice regarding an account i have (hope i am posting in the right section) to which i have been burying my head in the sand. this is the situation......

In 2001 i entered my first year at university and decided to open up a student account at a well known high street bank. Eventually i had used up all of my overdaft facility so i decided (rather stupidly) to open up another student account with another well known high street bank. My first student account was never a problem as subsequent student loan cheques automatically went into this account clearing my overdraft and putting me back into credit.

I am now a graduate and still use this account which is fine. The problem i have is the second student account i opened - I used up the whole overdaft facility within my first year at uni and actually went slightly over = interest charges. In 2002 the bank wrote to my address at the time (student flat) saying that as no money had ever entered the account (my student loan was going into my other account) i would have to repay the full amount plus interest for being beyond my overdraft. I subsequently rang the bank and arranged to pay back the money in installments but soon after realised i didnt have the money to do so. instead of sorting it out i ignored the issue and over the ensuing 6 months started receiving letters from a debt recovery agency. Soon after i left uni and the addressi was at as i was having some problems and i have never since been in a position to pay back anything (plus the account was opened so long ago i forgot about it for some time).


I am currently unemployed and although i have a degree i have over £20,000 student loan to pay back (acruing interest monthly) so i am not in a position to sort out my student overdraft problem. What shall i Do? Shall i contact the bank? Is it worth me just ignoring the problem? Its been over 4 years since i last received a debt recovery letter- do the banks write accounts off after a specific period of time? My mate reckons that after 6 years accounts are wiped but he's hardly an expert!

Seriously any advice would be greatly appreciated- i have ignored this problem for too long and am worried about the interest on the account (which i fear is going to be massive). I read on this website that certain bank charges are illegal so could i get the interest removed? i also live back at my parents at the moment and dont want them finding out about the problem, bailiffs turning up etc. Please help

el_matty

anybody with any advice?

fatbelly

I think this may be an occasion where you should let sleeping dogs lie. However, it would be worth checking your credit file to see if there is a CCJ on it.

Debts don't get wiped off after six years but do become unenforceable in the courts (statute barred) if you don't acknowledge them for six years. The factsheet here sets it all out. The important bit is the following paragraph.

You may have had a debt with an ordinary unsecured creditor that you have not heard about for a very long time. You may have moved address or thought the debt had been written off. Out of the blue a letter arrives from the original creditor or a debt collection agency asking you to make a payment. You can argue that the creditor is out of time or “statute barred” from taking you to court for this debt if the creditor has not already obtained a judgment against you and you, or any one else owing the money (on a debt in joint names) have not made a payment on the debt during the last six years and you have not written to the creditor admitting you owe the debt during the last six years.

CLAPTON

as you're unemployed i dont see why you want to resurrect this debt at the present time. am i missing something here?

if your aim is to avoid paying then best to do nothing for a further two years (i.e. until 6 clear years has gone by and hope a CCJ hasn't been issued), however, if you want to clear the debts i'ld wait until you have a job and are in a position to pay.

el_matty

my main concern is the interest that may be building on what i owe- i have no idea what the rate of interest is? i realise i am not in a position at the moment to pay it back but i'm thinking if the amount of interest is ridiculous then it might be better to get in touch with the bank sooner than later to see if i can halt the interest for the present time?