Statute Barred?

ShaunJUK

How do I know when a debt becomes statute barred?

I have 2 credit cards which are coming up if not over 6 years old, they are from 2006.

I received a letter today from one stating that they will accept £467.11 for the £2,333.11 debt.

The offers are getting more tempting so if I did pay what would happen to my credit rating? Do I have to pay? What exactly is Statute barred? Shoud the debts be off my credit report anyway?

Willing2Learn

Hi Shaun,

The debts are considered statute barred six years after the date you either last acknowledged the debt OR made a payment.

Once an account is statute barred, it is no longer legally enforceable.

Even if the debt isn't legally enforceable, it does still exist and payments can be requested. For this reason, it would not be advisable to open account with the same banking group in the future.

Credit accounts drop off from your credit reports six years after the date of default.

Edit: If the letter you have just received is regarding an account that will become statute barred in the near future, any response by you might be considered an acknowledgement of the debt (subject to what you say in the response). So be very careful!

GlynD

Willing2Learn wrote: »

Hi Shaun,

The debts are considered statute barred six years after the date you either last acknowledged the debt OR made a payment.

Once an account is statute barred, it is no longer legally enforceable.

Even if the debt isn't legally enforceable, it does still exist and payments can be requested. For this reason, it would not be advisable to open account with the same banking group in the future.

Credit accounts drop off from your credit reports six years after the date of default.

Actually I believe the period starts from 6 years after the debt has not been pursued and is only restarted IF you acknowledge the debt.

spacey2012

A clue that the debts have become barred is a bottom feeder debt collector starts writing to you.

Tixy

GlynD wrote: »

Actually I believe the period starts from 6 years after the debt has not been pursued and is only restarted IF you acknowledge the debt.

This is not correct. The creditor could send a letter everyday for 6 years to the debtor. If the debtor does not make a payment, and does not write to acknowledge the debt in that time then it would become statute barred.

Shaun - the date a debt drops off your credit file is not related to the statute barred date. A debt drops off your credit file 6 years after a default date was entered. As Willing has explained in post #2 the relevant date for when a debt becomes statute barred relates to when you last paid or you last wrote to them, which won't be the same as the default date.

Therefore you could have debts that have dropped off your file that are not statute barred. And equally could have debts on file that are statute barred.

Willing2Learn

GlynD wrote: »

Actually I believe the period starts from 6 years after the debt has not been pursued and is only restarted IF you acknowledge the debt.

According to National Debtline, most unsecured credit debt is considered statute barred if:

The creditor has not already obtained a county court judgment (CCJ) against you;

and

you or anyone else owing the money (if your debt is in joint names) have not made a payment towards the debt during the last six years;

and

you have not written to the creditor admitting you owe the debt during the last six years.

Source: National Debtline Factsheet - Liability for debts and the Limitation Act

Edit: Beaten to it by Tixy (again)

GlynD

Tixy wrote: »

This is not correct. The creditor could send a letter everyday for 6 years to the debtor. If the debtor does not make a payment, and does not write to acknowledge the debt in that time then it would become statute barred.

Shaun - the date a debt drops off your credit file is not related to the statute barred date. A debt drops off your credit file 6 years after a default date was entered. As Willing has explained in post #2 the relevant date for when a debt becomes statute barred relates to when you last paid or you last wrote to them, which won't be the same as the default date.

Therefore you could have debts that have dropped off your file that are not statute barred. And equally could have debts on file that are statute barred.

If the creditor does not contact you (the debtor) for 6 years or more, you (the debtor) may be able to claim that the outstanding debt is Statute Barred under the conditions of the Limitations Act. Statute Barred means the creditor cannot use the legal system to enforce payment.

http://www.cleardebt.co.uk/debt-advice/downloadable-debt-help-guides/out-of-date-debt/

National_Debtline

Willing2Learn wrote: »

Edit: Beaten to it by Tixy (again)

I know that feeling all too well Always great advice too!

Willing2Learn

GlynD wrote: »

If the creditor does not contact you (the debtor) for 6 years or more, you (the debtor) may be able to claim that the outstanding debt is Statute Barred under the conditions of the Limitations Act. Statute Barred means the creditor cannot use the legal system to enforce payment.

http://www.cleardebt.co.uk/debt-advice/downloadable-debt-help-guides/out-of-date-debt/

The bit of the quote I have emboldened is what I tried to make clear in my original response to the OP. I hope it was clear (it was meant to to be)

Tixy

GlynD wrote: »

If the creditor does not contact you (the debtor) for 6 years or more, you (the debtor) may be able to claim that the outstanding debt is Statute Barred under the conditions of the Limitations Act. Statute Barred means the creditor cannot use the legal system to enforce payment.

http://www.cleardebt.co.uk/debt-advice/downloadable-debt-help-guides/out-of-date-debt/

Regardless of what the website in your link states I can assure you that interpretation of the Limitation Act is incorrect - and not how judges have interpreted it in court.

Willing2Learn

National_Debtline_representative wrote: »

I know that feeling all too well Always great advice too!

:rotfl:

And it's so darn frustrating. You take the time to cut and paste the quote, put the link and give all the relevant info only to find out that Tixy beat you to it, with an an informative and well-written post that clearly articulates the correct advice. :cool: