Statute barred debts

cookiescrumble

I wonder if someone can help to clarify if two debts are statute barred?

I’ve not made any payment to either of these or entered into any correspondence about either of them since 2014. Neither debt shows on my Credit Report. I didn’t check this until recently and I can only assume that they both did but are no longer reported.

I’m due to receive a lump sum which I intend to use to pay debts. I claim Universal Credit and I want to ensure that the DWP will not consider me to have deprived capital by paying unenforceable debts.

The first is an overdraft. I have a Default Notice dated 23/1/15. A payment was made to the account on 10/10/16 by another bank, refunding interest. I did not make this payment (or authorise it). I’m unsure if the limitation period for this debt commences on 23/1/15 or 10/10/16? Ie if the debt is statute barred?

The other is a credit card debt. I don’t have a Default Notice or any correspondence confirming that one was issued. I have a letter dated 6/6/16 advising that the bank have instructed a debt collector to collect the outstanding debt due (which was the total amount).

I suspect that with the Overdraft, it may be relatively straightforward for someone in the know to advise. I suspect more information might be needed to clarify if the credit card debt is statute barred. If so, what information is missing and how should I go about getting it?

Thank you very much.  

fatbelly

Actually the credit card debt is easier. You haven't made a payment to it since 2014 - it should have been defaulted when 3-6 months in arrears and it has now dropped off your credit report, which infers that it was. So that one seems pretty clear, and I wouldn't pay it.

The overdraft would be statute barred but there is the complication of the payment on 10/10/16. The question is did that restart the limitation period? According to the Limitation Act in order to count, it must be a payment by 'the debtor or his agent'. It sounds a bit odd that one bank should pay a refund to another anyway but if it was not on your instruction I think I would argue that they were not acting as your agent. However a bank would argue the opposite and a judge might be convinced. I am sorry I can't be definite.

I'm interested why you are keen to avoid intentional deprivation of capital. Are you actually looking for legitimate things to spend on to run down some capital?

cookiescrumble

Hi fatbelly

Thank you very much for your reply. This is really helpful.

Re deprivation of capital, I think that maybe I need to dial it down a bit! I’ve gone from one extreme to the other. I breached credit agreements that I never bothered to read to reading the small print with magnifying glasses!

Fortunately, I’m not under pressure to deal with these debts. And I won’t get the lump sum for a couple of months. Before I posted my conundrum, I thought that the overdraft is not statute barred (because of the interest payment which I agree was very odd) and that I should pay the debt in full.

Since I don’t have a Default Notice for the credit card debt (or any reference to one having been issued) this added to my confusion re the limitation period. But the facts are as you stated. I’ve not acknowledged the debt in writing (if ever) since 2014. I’ve not made any payments to it since 2014. And it’s not on my Credit Report.

I can’t say that any of this is “pretty clear” to me! But I can see why you say that it is to you and I’m very grateful for your advice.

fatbelly

OK so the plan with the credit card is just to ignore it as it's ancient history. If it comes back in any form, let us know.

I think with the overdraft, because it's debateable, you should wait till they write to you and then respond with the letter (it's in the sticky threads) that says 'I'm not acknowledging the debt but I think it's statute barred anyway' and see how they respond. I certainly wouldn't be paying it in full at this point.

That leaves your lump sum problem. On UC, assets of under 6k don't affect anything and over 16k boots you off UC

Between those two figures, they assume a 'tariff income' from your savings and reduce your payment accordingly.

https://www.turn2us.org.uk/Benefit-guides/Universal-Credit-income-and-capital/Capital-Savings

How much have you got coming?

cookiescrumble

I can’t thank you enough.

It’s all a WIP. I’m not 100% sure how much is coming and I’m unsure how much (enforceable) debts must be paid.

The enforceable or priority debts are HMRC and a utility. I will do as you advise with the credit card and overdraft. Thank you for making your advice easy for me to understand and follow.

But firstly, let me correct an error that I made in my first post. For some reason I missed out two little words! I wrote “I’m due to receive a lump sum” (which is correct) and “I claim Universal Credit” (which is incorrect). I should have written “I’m due to claim Universal Credit”. 

Leaving aside any considerations about UC, £50k or thereabouts should drop into my bank account (where there are and never have been any debts) by the end of April/beginning of May. I’ll have a clearer idea of the amount and timing next month.

Since 2014, I’ve been ‘up to my neck’ in serious illness – both mine and my partners’. Fortunately, one after the other and not both at the same time. I think there were two months (since 2014) when there was no illness. Rightly or wrongly, everything that could be neglected or kicked down the road was.

I made (I hope!) a full recovery. Unfortunately, my partner did not and he will never be able to work again. Very soon I hope to be able to juggle working part-time with being his carer. We're not there yet.

It’s been suggested to me that, under the circumstances, HMRC might waive or reduce the debt but I’ve not looked at the situation at all yet. I expect that the HMRC debt will be penalties/fines for not having filed tax returns (since 2014) rather than not having paid tax due. I don’t believe that there was any of that!

The utility is mad! Or maybe it’s me who’s mad for not spotting it sooner! We’ve not received electricity bills since before 2014 and we were overpaying the gas by £100 per month. I just assumed that we were paying dual fuel. Only we weren’t…

I’ve now got a chance to shift my focus from dealing with illness to dealing with debts. Then (I hope) we should be back on track.

fatbelly

You are not going to be claiming UC for some time unless those two debts are very large and have to be paid in full

There's a cutting Tax board on this site for the Tax one

There's an Energy board for the electricity one - I think the back-billing rules may apply to you 

https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-energy-back-billing-rules

cookiescrumble

Thank you for giving me a hand. Like I said, I cannot thank you enough.

I’ll get the ball rolling with HMRC next week. I’ll call them when I’m prepared. Thanks for the heads up re the Cutting Tax board.

I hope you’re right about back-billing! I’ll let you know…