Statute barred debt?

aymz1983

Evening all

My husband and I are in the process of tackling our debts which, after going through letters and credit files, isn't as much as we thought, which is nice to know.

My husband has an old welcome debt however, and his last payment to them was 24th May 2007. He has tried calling in the past but could not get past the company's security checks as he could not remember details, so could not go any further!
Last year he was contacted by a debt collection agency who said he needed to pay it. My husband queried this as the debt was one from when we had our first house, and he knew it was several years ago but the agent said no, it's not near the 6 year SB mark, he needed to set up a plan to pay it.

I've always told hubby not to do things on the phone (the rare time he gets a letter through) but he never listens, this time being one of them! So as he was on the phone, he set up a payment plan, and the first payment to the DCA was 7th June 2013.

I know (or at least did, im not sure if the rules have changed?) but if there was no activity on account from 6 years from the date of last payment,then the account would become SB. Now, I know that hubby ended up speaking with them and making the plan, but as it started after the SB date, does this still apply and would he still have to pay?

Thanks in advance

Horseunderwater

I'm no expert on this but I think that any ackowledged contact with a creditor resets the SB date.

National_Debtline

Hello there.

If a debt is statute barred, any payments made afterwards would not 'unbar' the debt.

The key issue here is whether or not the debt was actually statute barred at the point the payment was made. The six years doesn't always run from the date of the last payment, it could theoretically be a couple of months afterwards. If a loan or credit card contract had payments made according to the terms and conditions, the creditor wouldn't have the right to sue for the full balance owing under the contract until it had breached - which is usually after a couple of missed payments. The first point of breach is called 'the cause of action', and this is when the six years starts.

Having said all that, when you raise the argument of limitations the onus is on the other party to prove that the debt is not statute barred. Do consider raising a limitations argument to see what happens.

Our fact sheet gives more information.

Best wishes,

David @natdebtline

National_Debtline

Horseunderwater wrote: »

I'm no expert on this but I think that any ackowledged contact with a creditor resets the SB date.

Acknowledgement needs to be in writing from the debtor. Telephone acknowldgement doesn't restart the running of time.

David.

eyeopener2

Yes, it was statute barred, it's still statute barred and it will always be statute barred.....If it was 6 years.

Check the dates thoroughly , it seems pretty tight, but if you are right then stop paying if you wish.

It's the dates that are important and your husband could have dropped a clanger by a few days, because if he started paying before that magical 6 years, well, the clock has resumed ticking. Which is probably why they were so insistent.

Have a word with hubby and tell him to put the phone down in future!

Edit! National debtline say it far better than I do.....still have a word with hubby though, you could have strung it out for months.

double_mummy

any acknowledgement in writing or any payments 6 years from the default date/last payment/ last written acknowledgement (which ever is latest) will restart the clock to 6 years again

so your last payment was may 2007 was that a contractual payment? as most dont default until a couple of contractual payments have been missed which may push the date to july/august which would mean the payment in 2013 does restart the 6 years

but once a debt has become SB it will always be SB

aymz1983

Thank you everyone.

I asked him to call them today as when we were sat talking about what we owe and he mentioned it, it sounded strange, and the agent confirmed the dates were 24 May 2007 as last payment to the original creditor, and 7th June 2013 as when payment restarted.

I will certainly send out the letter regarding limitations and see where that gets us. Whilst we are obviously looking to pay back all we owe, hubby only has 3 debts - this one, and another two (of which one of those needs to be disputed!) and this one is significantly higher than the other two combined. If it meant that we could get away with not paying it (however morally judged we may be ) then it leaves us in a better position to deal with the rest, if that makes sense!

Thank you again

Lensman_2

I think a SAR is in order here so you can get the account history and get the dates right.

http://forums.moneysavingexpert.com/showthread.html?p=12547639#post12547639

£10 is a small investment considering what is involved.

If David (National Debtline) is right the cause of action would be 3 months after your last payment.

aymz1983

Thank you. Perhaps we'll do the SAR first, and then go from there. I have a feeling that the account defaulted, and then payment was arranged from there, which is where it last stood. But, I cannot be sure, so will get the necessary info first

Lensman_2

aymz1983 wrote: »

Thank you. Perhaps we'll do the SAR first, and then go from there. I have a feeling that the account defaulted, and then payment was arranged from there, which is where it last stood. But, I cannot be sure, so will get the necessary info first

No probs.

Call me soppy, but thanks for the thanks.

double_mummy

and seeing as it is welcome finance with all the terrible stories about them all over the web i would do the SARs request and include £10 fee and do a CCA request including a fee of £1 (do both the payments separate via postal orders) (make sure in your letter it states that these are not payments towards the account but are the statutory payments for the documents you are requesting) you can do both at the same time and then you have covered all the bases as it was taken out before 2007