Struggling with debt? Ask a debt advisor a question

steve811

StepChange_Rachael wrote: »

Hi Steve

Thanks for your post.

I’m sorry to hear of your friend’s situation. In most circumstances once the charging order is on the property the creditor will wait for the sale of the house and for the equity from the sale to pay back the debt.

Quite often charges and court fees will be added especially to begin with. There may be further costs added but with most debts this usually subsides or stops once it’s been passed to a collections agency.

If your friend has concerns about the fees added it might be worth your friend contacting the company and asking for a breakdown of the fees.

It is possible for the creditor to go back to court to set a final charge to force sale of the property but this is very rare.

Even if the creditor went ahead with further action to force sale it would still be the court’s decision and again this is rare that it would go ahead. Particularly if the house is not owned solely by the debtor as it could be argued that it isn’t fair for the other party or family living in the property.

You’ve not mentioned that an instalment order was in place originally for your friend to make regular payments to pay the debt back. If there was an instalment order made on or after 1 October 2012 and a payment hasn’t been missed then the creditor can’t apply for an order of sale.

If it gets to the stage that the creditor applies for an order of sale then your friend could still look to set a payment in place to pay back the debt through the court and defend the order of sale.

At this stage your friend could look to contact the agency collecting for the debt and offer an affordable payment to start paying the debt back.

Once the debt has been repaid your friend can apply to the court to have the charge removed.

If your friend would like some further advice regarding debts they can contact us at StepChange Debt Charity.

Thanks
Rachael

Many thanks for that. Can I ask, as the debt has now been passed to Moorcroft, who are obviously out for blood, how can he challenge the debt? From what he says when the original CCJ was awarded he was away a lot and did not get the court papers until 2 days after the hearing, which meant he did not have a chance to mount a defence. It seems unfair that a debt founded on unfair bank charges and rolled into a loan agreement as well can not be challenged, but how?

StepChange_Rachael

Hi

Thanks for getting back in contact.

It would be difficult to defend a charge at this stage as it’s already been secured on the property for a number of years. A defence is expected to be made in writing when the paperwork for the interim charge is made within 28 days of receiving it.

It’s also unlikely that your friend not receiving the paperwork because he was away from the property would be a suitable defence. This is because it falls to the responsibility of the debtor to update the creditor of the most up to date and accessible contact details.

However, if your friend feels there is reason to dispute the debt before it was a charge on the property due to unfair practice from the creditor, then I’d suggest making a formal written complaint with the creditor. If they’ve not already done so.

The creditor will then have 8 weeks to reply. If they don’t reply or your friend isn’t happy with the response your friend could then contact the Financial Ombudsman who’ll look into the dispute further.

It’s important to keep Moorcroft up to date of the dispute in the meantime.

If your friend is looking to go forward with a dispute it might be worthwhile they seek legal advice. As the charge is on the property and has been for some time legal advice might be necessary.

If your friend would struggle financially to afford legal advice then Civil Legal Advice might be able to help. Your friends local Citizens Advice might be able to help as well.

Thanks
Rachael

steve811 wrote: »

Many thanks for that. Can I ask, as the debt has now been passed to Moorcroft, who are obviously out for blood, how can he challenge the debt? From what he says when the original CCJ was awarded he was away a lot and did not get the court papers until 2 days after the hearing, which meant he did not have a chance to mount a defence. It seems unfair that a debt founded on unfair bank charges and rolled into a loan agreement as well can not be challenged, but how?

StepChange_Rachael

Hi

Welcome to the forum.

It sounds like 1st Credit is collecting for the Halifax debt. It’s very common for debts which have defaulted with the original creditor to be sold on for another agency to collect. The new collections agency (1st Credit) would then have a legitimate right to chase for the debt.

A debt can’t default twice so it’s likely that the default they’ve mentioned is the original default with Halifax when the first payment was missed, cancelling the original contractual agreement.

You’ve mentioned the debt is listed as settled. If the debt was settled and paid in full and there is no outstanding debt then it’s important your partner asks for the full details and breakdown of payments made to the debt. This is so they’ve proof nothing remains owed and this can form a defence. Halifax should still have this information on file.

You can then make a written complaint to Halifax by using their formal complaint route that should be on their website and I'd suggest to also keep 1st Credit updated.

Sometimes creditors will accept a full and final settlement that’s less than the total debt owed. In this case they are accepting to close the account but without the full amount being paid back. In this case it’s important a letter is obtained from the creditor stating they are agreeing to the settlement and that they will not chase for the debt.

This letter can then be used as proof if they do chase for the debt at a later date. Without the letter it could be difficult to prove.

If your partner did agree to a full and final settlement then I'd advise them to try and find any paperwork from Halifax stating this is the case. This can then be used to form a written dispute with Halifax and 1st Credit.

If your partner would like further advice regarding a way forward with any of their outstanding debts you can find our contact details for StepChange Debt Charity here.

Thanks
Rachael

roobalboobal wrote: »

I need some advice regarding 1st credit! Please help!

We're currently trying to sort out my partners debts as looking into buying a house and found unpaid debts on his credit file....that's a whole other story. Basically my partner has started to receive letters from 1st credit regarding a Halifax account, the account in question states it was settled in 2014 on his credit report. 1st credit are now trying to get £600 odd out of us and have put themselves on his credit report stating he defaulted in 2013 even tho he'd never even heard of them until 2 weeks ago. How do we deal with this? They sent a letter saying he'd missed the first payment of his agreed payment plan when there was no such thing set up! HELP!!!

inepta

Hi,
could you please clarify: Once a default has been applied it can only be applied once and a default cannot be re-issued every month for an infinite length of time.
I spoke to 3 people today at stepchange who all told me that that the debt can be continually defaulted and can be sold on and defaulted again and again until 6 years after the payment arrangement comes to an end.

This is worrying and I feel incorrect advice.

onwardsandupwards127

Hi all

I did post this in another section but think this one might be better.

As my title reads, could anyone please offer me some advice.
I have a statute barred debt, I have received a county court claim form, stating the claim from 06/09/10 and the claim was issued on the 13/09/16
I have contacted stepchange who advised I need to fill out the defence section. I can see where I need to tick but am worried to fill out the defence section where I can include writing.
I have searched on here and found the following as advised by someone else:

First one:

The Defendant contends that as this is a claim in contract and an excess of 6 years have passed since any cause of action may have accrued, any alleged debt is therefore statute barred pursuant to section 5 of the Limitation Act 1980.

The Claimant's claim to be entitled to payment of £ or any other sum, or relief of any kind is denied.


Second:


“An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

I would point out that in their Consumer Credit sourcebook, the Financial Conduct Authority states the following rules:

"...a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period." 7.15.4

"A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred." 7.15.8

The last payment or acknowledgement of this debt was made over six years ago and no further acknowledgement or payment has been made since that time. Unless you can provide evidence of payment or written contact from me in the relevant period under Section 5 of the Limitation Act, I suggest that you are no longer able to take any court action against me to recover the alleged amount claimed.

Could anyone please confirm I am ok to use either of these in the defence section please or is there somthing else I should put in the box?

Really appreciate your help

Cosmic-bee

Help.....
Disabled and sick, not working, have live in carer
Fought to keep head above water since I became ill 20 years ago
Own property with £125k equity, and need to move to property soon (next 10 yrs) to help with disability needs and access
Finally juggling went wrong and and the result is

Four credit cards totalling £25600, consisting of:
£2000 overdraft
Virgin £12780
Santandair £8210
B a rclaycard £1830
Tesco £790

After doing a budget on phone with stepchange im left with £21 pm to pay off debts
It will take over 70+ years! I will be dead
How do I sort this out, with a DMP does the figure get reduced? Do I need to sell my home?

What is the best action forward?

Former_StepChange_Richard

inepta wrote: »

Hi,
could you please clarify: Once a default has been applied it can only be applied once and a default cannot be re-issued every month for an infinite length of time.
I spoke to 3 people today at stepchange who all told me that that the debt can be continually defaulted and can be sold on and defaulted again and again until 6 years after the payment arrangement comes to an end.

This is worrying and I feel incorrect advice.

Hi there,

Thanks for you message. Hopefully I will be able to clear this up for you.

A default notice cannot be registered more than once. A notice of default is showing that you have broken the terms of the credit agreement you had with your creditor. Once you have broken this, you cannot break it again.

The notice of default will ask you to make up the missed payments that have occured. If you do not, the creditor is entitled to terminate the agreement, pass the debt to a collection agency or start court action.

The default notice will remain on your credit file for six years and it will likely impact your ability to obtain further credit.

Not wishing to complicate things, but just to explain, if the debt is passed to a collection agency, the new company can register a default under their name but, importantly, the amount and date must be the same as the original entry. The original entry should be updated with a marker to make it clear the debt has been sold on, so that anyone looking at your credit history in the meantime isn’t misled into thinking there were two separate debts.

I hope this helps.

Take care
Richard

Former_StepChange_Richard

Cosmic-bee wrote: »

Help.....
Disabled and sick, not working, have live in carer
Fought to keep head above water since I became ill 20 years ago
Own property with £125k equity, and need to move to property soon (next 10 yrs) to help with disability needs and access
Finally juggling went wrong and and the result is

Four credit cards totalling £25600, consisting of:
£2000 overdraft
Virgin £12780
Santandair £8210
B a rclaycard £1830
Tesco £790

After doing a budget on phone with stepchange im left with £21 pm to pay off debts
It will take over 70+ years! I will be dead
How do I sort this out, with a DMP does the figure get reduced? Do I need to sell my home?

What is the best action forward?

Hi there

Thanks for getting in touch. I'm sorry to hear of your illness and I can understand your concern about your situaiton.

I don't have access to any information from the advice session you've had with us so I can't comment on anytthing from it. All I can say is if you're happy with the budget you have made and feel this is an accurate reflection of your finances, the advice you have been given should be appropriate for your situaiton.

If you're in any doubt about this, it would be best to speak with us again to make sure we are giving you the right advice. All our contact details are available here.

A DMP (debt management plan) is an informal arrangement where we will support you in making reduced payments to your creditors. The plan would run until you have paid your debts off, but you can end it at anytime before this if you wish. You are not required to sell your home as a recult of entering in to a plan like this.

Please call or let us know if you have any further questions.

Take care
Richard.

StepChange_Rachael

Hi

Thanks for your post.

It can become complicated when defending a county court claim as it goes from debt advice to legal and I’d suggest when defending a claim the defendant receive legal advice on how to complete this section.

If you’d struggle financially to afford legal advice then I’d suggest contacting Civil Legal Advice or the Citizens Advice for help to complete this section.

Thanks
Rachael

onwardsandupwards127 wrote: »

Hi all

I did post this in another section but think this one might be better.

As my title reads, could anyone please offer me some advice.
I have a statute barred debt, I have received a county court claim form, stating the claim from 06/09/10 and the claim was issued on the 13/09/16
I have contacted stepchange who advised I need to fill out the defence section. I can see where I need to tick but am worried to fill out the defence section where I can include writing.
I have searched on here and found the following as advised by someone else:

First one:

The Defendant contends that as this is a claim in contract and an excess of 6 years have passed since any cause of action may have accrued, any alleged debt is therefore statute barred pursuant to section 5 of the Limitation Act 1980.

The Claimant's claim to be entitled to payment of £ or any other sum, or relief of any kind is denied.


Second:


“An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

I would point out that in their Consumer Credit sourcebook, the Financial Conduct Authority states the following rules:

"...a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period." 7.15.4

"A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred." 7.15.8

The last payment or acknowledgement of this debt was made over six years ago and no further acknowledgement or payment has been made since that time. Unless you can provide evidence of payment or written contact from me in the relevant period under Section 5 of the Limitation Act, I suggest that you are no longer able to take any court action against me to recover the alleged amount claimed.

Could anyone please confirm I am ok to use either of these in the defence section please or is there somthing else I should put in the box?

Really appreciate your help

inepta

Thank you Richard. As i thought then. This was not what the advisors were telling me when i called in. I am worried that they will be giving incorrect advice to others.