Debt - Statute Barred?

Money18

I wrote a statute barred letter to Cabot Financial regarding a non-secured loan debt more than 6 years old.

They replied saying that as legal proceedings were initiated, even though a CCJ was not obtained, that the debt is no longer subject to the Limitations Act 1980 and so is not statute barred.

Court documents were apparently sent out by them to obtain a CCJ but were sent back as I don't live there. The last couple of letters were forwarded to me by my parents' tenants.

They said as the loan is no longer statute barred, they will hold the account for 21 days for me to contact them to arrange repayment, otherwise if they do not hear from me they will return the account to the collections process.. which I assume to mean they will try legal action to reapply for CCJ?

Dates of last payment, Default notice, any acknowledgment of debt, and their initiation of legal proceedings - were all more than 6 years ago.

They started court action before the limitations period was up and say "..court documents were sent back to their solicitors and stamped "does not live here". As such, no CCJ was obtained."

nationaldebtline.org states:
"Once a creditor has a county court judgment (CCJ) for a debt, the Limitation Act does not put any time limits on how long they have to enforce that judgment."

citizensadvice.org.uk states:
"If you’ve already been given a court order for a debt, there’s no time limit for the creditor to enforce the order.
If the court order was made more than 6 years ago, the creditor has to get court permission before they can use bailiffs."

A National Debtline advisor said that they may have a case that it's not statute barred, and in theory, you cannot be taken to court for the same debt twice, but as they never obtained a CCJ last time, this may be a possibility.

Citizen's Advice Bureau advisor said:
"They would have needed to obtain a CCJ to stop the debt becoming statute-barred. Simply issuing a money claim and then dropping the claim doesn't stop a debt from becoming statute-barred - they would have needed to get a CCJ."

They went on to say: "If they did take legal action to reapply for a CCJ, they would need to make a money claim at court - you would get a claim pack in the post. You would need to defend the debt within 14 days on the grounds that it is statute-barred."

These advisors have clearly contradicted each other.

Is there anyone here who is a solicitor who can answer the following?

Is it true that though they initiated legal proceedings, the fact a CCJ was not obtained within the 6 year period, means the debt is in fact statute barred? Or is it true that as legal proceedings were initiated, even though a CCJ was not obtained, that the debt is no longer subject to the Limitations Act 1980 and so is not statute barred?

Re: "you cannot be taken to court for the same debt twice, but as they never obtained a CCJ last time, this may be a possibility."
- Is this true?

What is my best course of action?

Thank you

sourcrates

Hi,


Its my understanding all a creditor has to do is start legal action.


However, as it appears you have conflicting advice, may i suggest you ask this on Legal Beagles, they are a more legally driven site than ours.

fatbelly

Yes that's a good shout from Sourcrates and you should do that.

You say 'Dates of last payment, Default notice, any acknowledgment of debt, and their initiation of legal proceedings - were all more than 6 years ago.'

The CAB adviser is incorrect*. The ND adviser is partly correct. Have Cabot told you the court claim reference (mixture of letters and numbers) and the court used? Is anything showing on your credit file?

I'd try to get those and then contact the court. You may find that the claim was struck out. It's also possible that Cabot are making some of this up.

* though probably just misled by their badly written information system

sourcrates

Agree with Fatbelly on this, never trust what a DCA tells you, always do your own investigations, all they are interested in is extracting money from you.

Money18

fatbelly wrote: »

Yes that's a good shout from Sourcrates and you should do that.

You say 'Dates of last payment, Default notice, any acknowledgment of debt, and their initiation of legal proceedings - were all more than 6 years ago.'

The CAB adviser is incorrect*. The ND adviser is partly correct. Have Cabot told you the court claim reference (mixture of letters and numbers) and the court used? Is anything showing on your credit file?

I'd try to get those and then contact the court. You may find that the claim was struck out. It's also possible that Cabot are making some of this up.

* though probably just misled by their badly written information system

Thank you both.

Re - Have Cabot told you the court claim reference (mixture of letters and numbers) and the court used?
- No they haven't. Should I also send them a SAR letter along with a request for the court claim ref?

Is anything showing on your credit file?
- No nothing.

Re - You may find that the claim was struck out.
- If it was struck out does that mean they can't re-apply for a CCJ on this debt - or could they still attempt to do so?

fatbelly

I hadn't thought about a formal SAR. But it costs nothing, and if the court ref doesn't appear on it, they haven't got it and this one is dead.

So if you're going to send a letter (which I recommend) it might as well be a SAR.

I suspect they're trying it on here because 'return to collections process' just means working through their standard letters. If they were threatening to reactivate a court claim, they would have used different wording.

CakeCrusader

Money18 wrote: »

I wrote a statute barred letter to Cabot Financial regarding a non-secured loan debt more than 6 years old.

They replied saying that as legal proceedings were initiated, even though a CCJ was not obtained, that the debt is no longer subject to the Limitations Act 1980 and so is not statute barred. < This isn't right. The Limitations Act gives them a 6 year time limit to start court proceedings. If they don't start one at any point in these 6 years and you haven't acknowledged the debt in writing then it's statute barred. It still exists, they just can't go through the court.

Court documents were apparently sent out by them to obtain a CCJ but were sent back as I don't live there. The last couple of letters were forwarded to me by my parents' tenants. < I don't think this makes any difference, the court docs are sent to the address the creditor has on file.

They said as the loan is no longer statute barred, they will hold the account for 21 days for me to contact them to arrange repayment, otherwise if they do not hear from me they will return the account to the collections process.. which I assume to mean they will try legal action to reapply for CCJ? < Just write back saying that you don't acknowledge the debt, and the alleged debt is statute barred under the limitations act. If they take it further and you're issued with a claim form just write that the debt is statute barred (and why) in the defence section of the form.

Dates of last payment, Default notice, any acknowledgment of debt, and their initiation of legal proceedings - were all more than 6 years ago. < 6 years but the clock resets if you acknowledge the debt in writing or make a payment. Just be very careful how you word your letters.

They started court action before the limitations period was up and say "..court documents were sent back to their solicitors and stamped "does not live here". As such, no CCJ was obtained." < Then it's statute barred as no CCJ was ever obtained.

nationaldebtline.org states:
"Once a creditor has a county court judgment (CCJ) for a debt, the Limitation Act does not put any time limits on how long they have to enforce that judgment." < this is for after a CCJ is awarded. You don't have a CCJ so this doesn't apply to you.

citizensadvice.org.uk states:
"If you’ve already been given a court order for a debt, there’s no time limit for the creditor to enforce the order.
If the court order was made more than 6 years ago, the creditor has to get court permission before they can use bailiffs." < again, this doesn't apply to you, this is for after a CCJ has been awarded by the court.

A National Debtline advisor said that they may have a case that it's not statute barred, and in theory, you cannot be taken to court for the same debt twice, but as they never obtained a CCJ last time, this may be a possibility. < again, to be statute barred there needs to be no payment or written acknowledgement of the debt for 6 years following the default. They may try and obtain a CCJ, but if you're certain that it is statute barred then you use this as your defence.

Citizen's Advice Bureau advisor said:
"They would have needed to obtain a CCJ to stop the debt becoming statute-barred. Simply issuing a money claim and then dropping the claim doesn't stop a debt from becoming statute-barred - they would have needed to get a CCJ." < correct. The Limitations Act gives them a period of 6 years to enforce the debt through the courts. If they don't do this within the specified time fram then they can't do it later.

They went on to say: "If they did take legal action to reapply for a CCJ, they would need to make a money claim at court - you would get a claim pack in the post. You would need to defend the debt within 14 days on the grounds that it is statute-barred." < also correct.

These advisors have clearly contradicted each other. < not really. Two are talking about after a CCJ has been awarded, the CAB is talking about before.

Is there anyone here who is a solicitor who can answer the following?

Is it true that though they initiated legal proceedings, the fact a CCJ was not obtained within the 6 year period, means the debt is in fact statute barred? < Yes. Or is it true that as legal proceedings were initiated, even though a CCJ was not obtained, that the debt is no longer subject to the Limitations Act 1980 and so is not statute barred? < No.

Re: "you cannot be taken to court for the same debt twice, but as they never obtained a CCJ last time, this may be a possibility."
- Is this true? < I wouldn't worry about this. You can't get a CCJ for the same debt twice but there's no CCJ here so they could seek a CCJ, but as it's statute barred it's highly unlikely that they will be awarded one.

What is my best course of action? < https://www.stepchange.org/debt-info/can-i-write-off-debt/statute-barred-debt.aspx There's a template on here. If they do start court proceedings and you receive a claim pack, you have to make sure that you fill in that this debt is statute barred in the defence section and explain why (last payment was XXXX, and is statute barred under the Limitations Act)

Thank you

I hope this helps, come back if you have any more problems with this though.

WhenIam64

They replied saying that as legal proceedings were initiated, even though a CCJ was not obtained, that the debt is no longer subject to the Limitations Act 1980 and so is not statute barred.

May we see the letter.

It appears to be a literal interpretation of the rules but perhaps not a legal one. And the important bit is who has said it. There may be room for a complaint to the Solicitors Regulation Authority or FCA but sight of the letter is better.

poppasmurf_bewdley

Always remember that once a debt becomes Statute Barred, nothing can then make it unbarred.

WhenIam64

Always remember that once a debt becomes Statute Barred, nothing can then make it unbarred.

That is not the issue. The issue is what is the legal definition of "Statute Barred". The actual legislation has been amended a number of times, but the Doyle case clarified certain issues with regards to the definition.

https://www.bailii.org/ew/cases/EWCA/Civ/2019/12.html

It would be useful to see who said what and why by seeing the letter. There may be a twist to Doyle that is not yet clear. I've never certain about certainties so would appreciate seeing what has been said.

Money18

Hi Poppasmurf thank you for your reply. As WhenIam64 mentioned the issue is what is the legal definition of "Statute Barred". They’re disputing that it is in fact Statute Barred because they started legal proceedings before the 6 years was up even though they didn’t continue with proceedings in the end or obtain a CCJ..

I’m trying to determine if legally this is correct or not?