Old Debt

minimin

Does anyone know about the '10 year rule' with regard to old debt?

I have recently been contacted by a debt collection agency with regard to a debt from 1995. I have been told by a few people that I shouldn't have to pay this as it is over 10 years old. When i put this to the company, they argue that they got a CCJ against me when i was in temporary accomodation in 2000. The fact i was only there 6 weeks (and 2 months prior to the CCJ) doens't seem to make a difference.

With interest etc, this is now a sizable debt (over £20,000), which i simply can't afford to pay.

So, does anyone know about this 10 year rule i keep hearing about?
Any help would be much appreciated.

tigtag02

Its actually 6 years for a debt to be classified as statute barred and certain conditions apply and it doesnt cover all debts (ie: Council Tax)

Have you have any correspondence with regards to this debt within the last 6 years?
Who was the original lender?
Have you spoken / written to the DCA who have contacted you?

tigtag

minimin

Hia Tigtag, thanks for the info.

The only correspondance I have had is the letter detailing how much the debt is now, and the paperwork from teh CCJ from 2000.

When i rang them and questioned if I need to pay as it is so old, and they said it does (no suprise there then).

The original lender is citi bank, from a mortgage to buy my council house.

redpoison

send them this letter:

(name and address)

Date 25/09/2007

Dear Sir/Madam

Acc/Ref No:-

You have contacted me regarding the account with the above reference number, which you claim is owed by myself.

I would like to point out that under the Limitation Act 1980 Section 5 “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 also point out that the OFT say under their Debt Collection Guidance on statute barred debt that “it is unfair to pursue the debt if the debtor has heard nothing from the creditor during the relevant limitation period”.

The last payment 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 myself 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 us to recover the alleged amount claimed.

The OFT Debt Collection Guidance states further that “continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statue barred could amount to harassment contrary to section 40 (1) of the Administration of Justice Act 1970”.

I await your written confirmation that no further contact will be made concerning the above account and confirmation that this matter is now closed.

I look forward to your reply.

Yours faithfully

NAME
xxxxxxxxxx

sign it

rog2

minimin wrote: »

The original lender is citi bank, from a mortgage to buy my council house.

Property related debt, such as mortgage shortfalls, are not covered, in the same way as normal consumer debt, by the Limitations Act, and do NOT legally become 'statute barred' for 12 years.
However the Council of Mortgage Lenders have, voluntarily, agreed to abide by the 6 year ruling, with one proviso: whereas, with normal consumer debt the reference to 'not having acknowledged the debt for 6 years' means that the debtor has to actually acknowledge the debt in writing, Mortgage Lenders state that them writing to the debtor constitutes contact/acknowledgement.

Also, the CCJ paperwork, could throw another spanner in the works for you. If there is a CCJ number, and court, you may need to apply to the court and apply to have the judgement set aside.

I think you may be advised to have a word with National Debtline or CAB before going straight down the statute barred route.

minimin

The 12 year statute barred is interesting, as they wrote to me 23 days before 12 years since the debt/ last contact.

I have just had a very interesting phonecall with a very helpful lady from National debt helpline. She has advised applying to the court to have the CCJ 'set aside' as it is now over 6 years old. If the court agrees, it will be wiped form account, and then the debt will become statute barred, as it is now over 12 years since last payment. However, if it is turned down I am back at square 1 and £65 out of pocket.

However, she also said that because the CCJ is over 6 years old (and therefore out of date), the collection agency have to apply to court before they can take any action. The court could either ok them to take action against me, or wipe the debt off as it is so old.

Other than that, the only two options I have are: 1) Pay (37 years at £50 per month), and 2) bankruptcy.

Thank you for all your help and especially suggesting I contact hte national debt helpline, as they were really helpful and very friendly.