Overdraft debt

faultylightbulb

Hello

I recently convinced my boyfriend to let me help him with his debt.

He has an overdrawn account with Halifax which has gone to a debt collectionagency. He has not opened any letters for 3 years but he let me do it the otherday. The last dated later is September 2011 and says about being taken tocourt.

What should iIdo to help him?

Tixy

How long since he last paid anything to the overdraft? or stopped using the account?

Could it be statute barred? or close to being statute barred? That is 6 years since he last paid anything or wrote to the lender? (5in Scotland).

faultylightbulb

Hello

It must be around the 6 year mark as he had the account when he was a unistudent, so perhaps 5 years at my guess.

I dont think he has ever written to them or paid anything on it.

What is statue barred?

Tixy

A debt is said to be statute barred when due to its age and activity it falls within the Limitation Act.

When a debt is statute barred it means the debtor legally does not need to repay the debt, and cannot be taken to court in relation to the debt (or could defend if a creditor tried). The money is still owed but the debtor does not have to repay it.

A debt becomes statute barred if there is a period of 6 years where the debtor pays nothing towards the debt, and also hasn't written to the creditor or a debt collector to admit the they owe the debt, but only if court action against them has not commenced.

If its 5years and 11 months since a debt was paid, and the debtor makes a payment now, or writes to the creditor then the clock starts again and the creditor has another 6years to take the debtor to court.

With an overdraft the starting date is when it was officially recalled.

Have a read here - Statute barred debts and the Limitation Acts

faultylightbulb

Thanks very much!

If it does become barred what is the impact on his credit score for the future?

Also how would i find out when it was officially recalled?

Tixy

It will fall off his credit file 6 years from the date of default. Thats regardless of whether it is paid or unpaid and a seperate issue to when/if it becomes statute barred.

They would have sent a letter to him when they recalled it - so you could satart by seeing if he has this (seeing as he had the ones from 3years ago).
If not then its harder to know for sure, and sometimes the best option is to wait until long after you think it will be SB before replying to any letter chasing for it.