Debt written off after six years?

lime1996

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My friend came around yesterday and told me she is moving out of the area, after talking to her about her move it turns out she has a pile of debt and she says she can not afford to pay it off. She changed her surname, thinking they will not find her, and when companies call her she fails their security questions, so they think they have the wrong person. She has changed banks using her new name. She says in five years she can apply for a new mortgage, as her credit report will be clean.

She told me not to worry that the debt will all be wiped off her credit file after six years, so there is no point in paying any of it back, as she has been doing this for three years avoiding paying the debt. So, she says she only has another three years to go before her credit report is clean.

I thought they would go after her regardless of the length of time since she created the debt. I suggested she goes to the CAB and get advice but, this is not what she wants to hear.

So will the debt be wiped from her credit report? Who is correct?

Tixy

After 6 years of her not paying anything towards a debt or acknowledging to the creditor that she owes the money and only if they don't take her to court first - then her debt would become statute barred. That wouldn't mean its written off - it will still exist but legally she wouldn't be required to pay it off.

Thats a lot of ifs though - the main one being if they take her to court before the 6years is up. If she moves and doesn't tell them her new address they'd only have to send court papers to her last address and when she doesn't reply they'd get a CCJ against her. That would go on her credit file for another 6 years (and changing her name won't stop the CCJ appearing on her credit file). If she has a lot of creditors that increases the chance some of them at least will take court action.

If they choose to take her to court then after 6years from when she defaulted the debt and the default would go from her credit file - but she will still owe the money.

Her plan might seem like a good one to her, but in practice it rarely works these days.

paulmapp8306

TBH its a totally irresponsible attitude she has. She ran up the debts she should pay the. People like her are one reason why the banks are in a state and mortgages are harder to come by, interest rates are higher than need be etc. I ran debts up of £44k !!!! yet have been paying them for 11 years and will be clear in another 2.


Rant over though - unfortunately she is right. Debts become statute barred so unenforceable after 6 years. that is 6 years without making a payment and without acknowledging the debt in writing.

While this can be of help to people with debt problems, who cant afford to pay it back through changes in curcumstances etc it also means that people who dont care about anyone but themselves can run up debt then ignore it and hide for 6 years and be clear.

She IS however likely to run into other problems down the line with Mortgages/credit. Changes of address adversly affect credit history just like defaults/arrears.

ILW

lime1996 wrote: »

My friend came around yesterday and told me she is moving out of the area, after talking to her about her move it turns out she has a pile of debt and she says she can not afford to pay it off. She changed her surname, thinking they will not find her, and when companies call her she fails their security questions, so they think they have the wrong person. She has changed banks using her new name. She says in five years she can apply for a new mortgage, as her credit report will be clean.

She told me not to worry that the debt will all be wiped off her credit file after six years, so there is no point in paying any of it back, as she has been doing this for three years avoiding paying the debt. So, she says she only has another three years to go before her credit report is clean.

I thought they would go after her regardless of the length of time since she created the debt. I suggested she goes to the CAB and get advice but, this is not what she wants to hear.

So will the debt be wiped from her credit report? Who is correct?

I think you need to get some new friends.

She sounds a complete low life.

concerned43

this may help your friend
http://debtadviceuk.net/do-you-have-to-pay-debts-over-6-years-old/

Tixy

paulmapp8306 wrote: »

Rant over though - unfortunately she is right. Debts become statute barred so unenforceable after 6 years. that is 6 years without making a payment and without acknowledging the debt in writing.

Only if they don't take her to court though - if they obtain a CCJs then the debt will never be statute barred.

sickasachip13

Oof, she's putting a lot of effort into trying to avoid it. Personally I'd rather face it and start paying it than be looking over my shoulder all the time!

TBH, she'll probably not learn from her previous mistakes either and will end up racking up a load more debts.

I reckon, at some point, this debt is going to come back a mighty sight bigger and bite her on the butt!

But, what can you do...? You've tried to give good advice, she's an adult and has to make her own decisions. Doesn't mean she's a bad person, she's just making some poor choices!

sickasachip13

Oh, further thoughts -

She's never lived with you has she? Or had any financial dealings with you?

Be careful about getting dragged into this mess and, this might sound really harsh, just make sure she couldn't use your information to get credit (sometimes people in dire straights do desperate things - it might be worth getting yourself a credit check just in case).

Gordon_Hose

She's either got 5 years or 3 years to wait, which is it??

Anyway, if your story is, indeed, true, it doesn't matter if she's changed her name and moved. They can still take her to court and get a CCJ against her. If she hasn't told them of her new address, the paper work will go to her old address and she'll get a judgement by default.

Her new name should now be linked with her old name on her credit report. If she's not disclosed her name on her new bank account application she's also committing fraud. It's not as easy as just changing her name. If she never discloses her old name to the CRA's to view her file, then technically she doesn't have a credit history and her file is clear now. So something tells me she knows the two names are linked, especially as she knows she has to wait another 3 years (5 years??) for the bad stuff to drop off.

3 years (5 years??) is a long time to wait, hoping they don't discover her.

lime1996

Thanks everyone. I am just a taken aback by her view on all this, it makes me wonder why I try so hard to live within my means and take on no debt. If I don't have the money I don't buy it. She told me well she has kids and they need 'stuff', I reminded her I had kids as well!

lime1996

When I say her 'new name' she has gone back to her maiden name, as her debts were made in her married name. She told me she has been doing this for 3 years avoiding the debts and using her maiden name.

In about another 5 years from now she plans to apply for a new mortgage with her maiden name. As she says by then everything will be off her report.
Sorry if I was not clear :-)