Statute barred, or not?

fatneck

Hi this is my 1st post and hopefully someone can advise me on my prediement? It started 13 years ago when i bought a new car for my then wife. The finance was through GMAC, in my name but she signed as guarenteur. 12 months later we're divorced, i hand the car back to the finance company as i had been left with aprox £20k of debt with the divorce.They said i owed them several thousand still, my answer was, as i was broke go ask the guarenteur....
I have not heard anything till now 12 years on, it appears the ex wife has been paying £5 a month all this time but must of now defaulted as i recieved a letter claiming i owe them £2800 and to get in touch asap to make arrangements to pay?

So the 1st question is, as i have not had any contact in 12years, is this debt classed as statute barred or has this debt been kept "live" to me through the ex wife paying it?

Secondly, it just so happens my employer runs a car scheme, like leasing, which i am on, but when i pick up my new car i have to sign agreement forms for the "loan value" and this is done through Gmac. Now would they be able to then put the scuppers on this if the debt is statute barred and i argue the case??
Many thanks in advance......

Tixy

I believe it probably is not statute barred because the other party has been making payments.

That would be the case with a debt in joint names - maybe a call to national debtline would be worthwhile with regards to it being a guarantor.

fermi

Tixy wrote: »

I believe it probably is not statute barred because the other party has been making payments.

That would be the case with a debt in joint names - maybe a call to national debtline would be worthwhile with regards to it being a guarantor.

http://www.legislation.gov.uk/ukpga/1980/58/section/31

(6) An acknowledgment of any debt or other liquidated pecuniary claim shall bind the acknowledgor and his successors but not any other person.

(7) A payment made in respect of any debt or other liquidated pecuniary claim shall bind all persons liable in respect of the debt or claim.

But yes, would be interesting to see if the fact it is a guarantor would make any difference? I don't think it would, but wouldn't like to say 100%.

DVardysShadow

Tixy wrote: »

I believe it probably is not statute barred because the other party has been making payments.

That would be the case with a debt in joint names - maybe a call to national debtline would be worthwhile with regards to it being a guarantor.

A debt with a guarantor is not a joint debt AFAICS.

I think it will work like this:

OP defaults on the debt. Does not pay nor acknowledge in writing. Kind Uncle Bill pays £100 after 3 years without OP's involvement. If Uncle Bill is not a Joint and Several party with OP, then Uncle Bill's payment as I see it will not reset the Statute Barred Clock. [Aside: It has to be like this, otherwise there would be a business model for Statute Barring Disenfranchisors - who would pay £1 to the DCA towards debts at say 3 years, in exchange for a cut of any settlement ultimately received.]

Now, I think that if the OP has met the Statute Barred criteria, the debt against him is Statute Barred. Now the guarantor has been paying £5/month. And I would think that this is a new debt arising from the guarantee [and OP's default] rather than from the original contract. Hence the debt against Op will be Statute Barred, whereas the debt against the Guarantor will not be Statute Barred.

Having said that, unless the Guarantee was given as a Deed, judging from opinion on the Housing Forum, the Guarantee may not be enforcable either.

edit: fatneck, I see you have thanked this. Beware, it is just an opinion.

fatbelly

The Money Advice Trust course on Limitations of Action that I went on (and that is the only handout I still regularly use) did cover this. Under 'Guarantors' there is a subheading 'acknowledgement and part payment'. It says

Acknowledgement and part payment apply in the usual way. An acknowledgement binds only the person making it. A payment by a guarantor or principal debtor starts time running afresh for both of them. However, a payment by a guarantor cannot revive a debt that is already statute barred against the debtor and vice versa

31(6) and 31(7) do seem to apply, in the view of the MAT specialists.

fatneck

DVardysShadow wrote: »

A debt with a guarantor is not a joint debt AFAICS.




edit: fatneck, I see you have thanked this. Beware, it is just an opinion.

I am thanking you for taking the time to reply to my post. I appreciate any constructive input, wether fact or a possability, cheers

DVardysShadow

fatbelly wrote: »

The Money Advice Trust course on Limitations of Action that I went on (and that is the only handout I still regularly use) did cover this. Under 'Guarantors' there is a subheading 'acknowledgement and part payment'. It says

Acknowledgement and part payment apply in the usual way. An acknowledgement binds only the person making it. A payment by a guarantor or principal debtor starts time running afresh for both of them. However, a payment by a guarantor cannot revive a debt that is already statute barred against the debtor and vice versa

31(6) and 31(7) do seem to apply, in the view of the MAT specialists.

For me, this depends upon whether the guarantee is part of the original deal. If it is, then the guarantor is party to that deal and the clock is reset.

But there may be an argument to be made - dependent upon the facts of any case, that the Guarantee is a separate transaction. In the case of guarantors for tenancies [and there is nothing special which distinguishes them from the current case], as I said, the housing forum consider guarantees to be substantially worthless unless executed as a deed - which would make a separate deal IMO.

I also think that a court would not want to interpret s31(70

A payment made in respect of any debt or other liquidated pecuniary claim shall bind all persons liable in respect of the debt or claim.

too widely and allow a payment towards a debt by a well meaning but uninvolved benefactor.

If the guarantee is done as a separate deal I can suggest circumstances which might and should prevent a payment by a guarantor resetting the Statute Barred clock. For example a student is refused a tenancy for a lack of a guarantor. A grandparent contacts the letting agent direct and offers to step in to secure the tenancy unknown to the student. Tenancy taken up, student unaware of guarantee, just thinks agent has gone soft. Student defaults. Grandparent is contacted after 4 years and agrees to settle for monthly installments over 2 years. Grandparent dies at 5.5 years, leaving some of the debt unpaid. Student chased at 6 years 3 months.

fermi

fatbelly wrote: »

The Money Advice Trust course on Limitations of Action that I went on (and that is the only handout I still regularly use) did cover this. Under 'Guarantors' there is a subheading 'acknowledgement and part payment'. It says

Acknowledgement and part payment apply in the usual way. An acknowledgement binds only the person making it. A payment by a guarantor or principal debtor starts time running afresh for both of them. However, a payment by a guarantor cannot revive a debt that is already statute barred against the debtor and vice versa

31(6) and 31(7) do seem to apply, in the view of the MAT specialists.

Thanks for confirming that fb.