Tme Barred Debts - What happens to debt after 6 years?

ollie75

Hi

I am aware that debts over 6 years old are removed from your debt file after this period. However what happens to them? Do they cease to exist or are they still enforceable? What is the legal situation regarding these debts?

For example, does my credit rating improve as these debts no longer show?

Forgive my niavety in this, but I just wanted to know what happens to all these debts after 6 years.

Thanks.

Tixy

Debts are removed from your file 6years after the default date (as entered by the creditor).
As they are no longer on your file then they'll no longer affect your ability to get credit in general (aside from the actual creditor to whom the money is still owed).

The debts don't cease to exist but if there has been a period of 6years with no payment towards the debt, no written acknowledgement by you that you owe the money and if they haven't taken you to court then the debt would become statute barred. This means that the debt still exists but you are not legally required to pay it and can't be taken to court (well really that you could defend any court action).

The 6year time for a debt becoming statute barred is not related to the default date though, a debt could be statute barred several months before the default is 6years old, or the default could be removed but the debt be nowhere near being statute barred.

(The laws are different in Scotland in relation to statute barred debts - but not in relation your credit file)

immoral_angeluk

After 6 years of non payment and no written acknowledgment of the debt, it becomes Statute barred and unenforceable in court. The debt drops off your credit file 6 years from the date of default. They will be likely to still chase for it but it's unenforceable and so you should complain as to chase for unenforcable debts is against OFT debt collection guidance.

immoral_angeluk

Tixy wrote: »

Debts are removed from your file 6years after the default date (as entered by the creditor).
As they are no longer on your file then they'll no longer affect your ability to get credit.

The debts don't cease to exist but if there has been a period of 6years with no payment towards the debt, no written acknowledgement by you that you owe the money and if they haven't taken you to court then the debt would become statute barred. This means that the debt still exists but you are not legally required to pay it and can't be taken to court (well really that you could defend any court action).

The 6year time for a debt becoming statute barred is not related to the default date though, a debt could be statute barred several months before the default is 6years old, or the default could be removed but the debt be nowhere near being statute barred.

(The laws are different in Scotland in relation to statute barred debts - but not in relation your credit file)

Beat me to it!

ollie75

thats great thanks!

davidgmmafan

"Debts are removed from your file 6years after the default date (as entered by the creditor)."

Interesting, I rather though creditors approach was that as its not paid they can destroy your credit rating forever. How exactly would someone go about this? And should it drop off automatically?

stokelady

I have some very old debts......not aknowledge in over 6 years, however around once or twice a year I get a letter from a random DCL ! Which changes every year !!

How can I be sure they are S.Barred? Can I write and ask them?

fatbelly

stokelady wrote: »

I have some very old debts......not aknowledge in over 6 years, however around once or twice a year I get a letter from a random DCL ! Which changes every year !!

How can I be sure they are S.Barred? Can I write and ask them?

No, but you can write and tell them!

https://forums.moneysavingexpert.com/discussion/2606811

simax

Tixy wrote: »

The 6year time for a debt becoming statute barred is not related to the default date though, a debt could be statute barred several months before the default is 6years old, or the default could be removed but the debt be nowhere near being statute barred.

So, if say you owed £10k and the debt became statute barred 15 months ago, the default for it could still be on your file for say another 9 month from say, today? The two could be really wide of the mark? Confusing!

haukefh

:money:Thank you

fatbelly

simax wrote: »

So, if say you owed £10k and the debt became statute barred 15 months ago, the default for it could still be on your file for say another 9 month from say, today? The two could be really wide of the mark? Confusing!

You've just got to understand that they are two separate things. If a creditor could extend the six-year period by delaying issuing a default notice or by issuing multiple default notices (and some will tell you that they can!) then they would do that.

However, it's been clearly established by the courts that time runs (on a credit debt) from when a contractual payment was missed and is only extended by the debtor or his agent acknowledging the debt by subsequent payment or in writing.

In practice there should not be as great a discrepancy as in your example as the ICO has issued guidance that the default should be issued after 3 missed payments and within 6 months.