The 12 year black mark on your credit file

AliceBanned

Also, what if the creditor applies for a CCJ say on 20th Feb 2009? then the default can fall off but become CCJ? thanks

DarkConvict

Fermi I'm sure will post the exact wording from the limitations act. But the Limitations act (statute barred) says that if the debtor has not made written acknowledgement of the debt or made payment on it for 6 years (5 in Scotland, different law). Then the debt becomes unenforceable in court (legally extinguished in Scotland, again different law).

Offering to settle the debt in writing, is written acknowledgement. The grey area is that letter is not presentable in court as evidence, due to the words "Without Prejudice". Its a grey area because you can't just tag it on all your letters, it needs to have a purpose and that's the part i do not understand.

A default and CCJ are separate, a default does not become a CCJ. What you need to understand is these things do not really just 'fall off'. They do last forever, however under guidelines for fairness and data protection act, only the last 6 years of data is visible on your report. So after 6 years since it was first added, although it is still there it is not visible which is where the term falls off has come from.

As these are seperate, its possible to have any combination.
No Default, no CCJ,
Default, no CCJ,
Default, CCJ,
No Default, CCJ

Default & CCJ
2000: Default placed. (Default on credit file)
2001: CCJ granted (Default & CCJ on credit file)
2002: (Default & CCJ on credit file)
2003: (Default & CCJ on credit file)
2004: (Default & CCJ on credit file)
2005: (Default & CCJ on credit file)
2006: Default falls off (CCJ on credit file)
2007: CCJ falls off (credit file clean)
2008: (Credit file clean)
2009: (Credit file clean)
2010: (Credit file clean)

Default, long gap, CCJ
2000: Default placed. (Default on credit file)
2001: (Default on credit file)
2002: (Default on credit file)
2003: (Default on credit file)
2004: (Default on credit file)
2005: (Default on credit file) (Made a payment/acknowledgement, so SB date is 6 years from now)
2006: Default falls (Credit file clean)
2007: (Credit file clean)
2008: (Credit file clean)
2009: (Credit file clean)
2010: CCJ granted (CCJ on credit file)
---- : ----
2016: CCJ falls off (credit file clean)

Default, long gap no payment, CCJ attempted
2000: Default placed. (Default on credit file)
2001: (Default on credit file)
2002: (Default on credit file)
2003: (Default on credit file)
2004: (Default on credit file)
2005: (Default on credit file)
2006: Default falls (Credit file clean)
2007: (Credit file clean)
2008: (Credit file clean)
2009: (Credit file clean)
2010: CCJ attempted (if you use statute barred defence, it won't be granted, if you do not defend you lose by default, although if you later learn of the CCJ you can ask to set it aside and submit the SB defence at a later date. You have a right to submit a defence at the hearing, and you have the right to submit a defence at a later date if you were unaware of the hearing + have a reason to dispute it, SB defence is a good reason.)

Its quite possible, for a creditor to forget to add a default to the file even if you have defaulted, and just go for a CCJ. A default is not required for a CCJ, money simply needs to be owed. They can't take out a CCJ on an account that is not defaulted as the agreement is in place. But if an agreement is defaulted (payments missed) then the creditor can do both (place default, get a CCJ) if they want to.

Defaults are generally applied as its a mostly automatic process, CCJs do require more manual intervention.

The purpose of default is to warn other creditors that you defaulted, this warning means risk and in turn effectively dent your credit file.

The purpose of CCJ, is so a creditor can secure the debt against a debtor. If a creditor gets a CCJ for a debt, then the debt will not go statute barred. Furthermore it allows the debt to be recovered via court action, bailiffs.
If creditors do not bother to get a CCJ within 6 years, then its there fault that they didn't bother. They can still get a CCJ in the absence of a debtor by doing a CCJ at the debtors last known address. If creditors do not secure a debt, its their own fault if they loose out when they find the person later.

If so this is totally a disincentive for anyone to pay, surely? thanks

Not really, because they could always go and take out a CCJ if the debt is not yet statute barred. As the debtor you then get lumbered with the court costs.

What people will tend to do is ignore the first few letters, if the letters continue they send the prove it letter and see what happens.

if you are in year 5 and know, its soon to go statute barred, then some people if contacted with try to lumber the DCA in paperwork like prove it requests and further prove it requests asking for more details, pushing the debt over the 6 years date.

The other reason why people do pay is too many people have no idea over there rights or are clueless with money and just pay demands for money on debts as they "probably" are owed.

AliceBanned

Thanks Dark Convict.

It is much clearer now. I think I will take advice from the CAB as well. It is so long ago that I do need proof that the figure is correct so will look into this.

AliceBanned

Hi

I posted on this a while ago and now have a letter from DLC stating that if I pay £350 they will "close the account and write off the remaining debt". Also states "we will also update your credit file with the credit reference agencies which should have a positive impact on your credit rating in the future".

By June this will be statute barred and I'm just concerned that if I pay this amount they would still go for a CCJ afterwards as I would then no longer be statute barred. Any advice would be helpful but I may check also with the CAB as I need to make sure I resolve the problem properly. I would not mind paying that amount and would have offered something in that region anyway but did not want to lose the statute barred. any advice would be much appreciated!