4yr old credit card debt

jamiesmack

I have 3 different debts with debt collectors

£7k PRA
£5k Hoist finance
£7k Intrum finance

according to credit karma they all defaulted around June 2014. They are probably credit card debts, as I was in a right mess a few years ago. I’m not even sure if the amounts are correct. 

I’m not in a position to pay any meaningful repayments to get them cleared any time soon. Not sure what the best step to take is.

as they are 4 yrs old, do I wait and hope they reach statute barred? As I’m not sure on the amounts would prove it letters be a better step? 

Or just offer them all £10 a month for the next 150 years…

any advice gratefully received 

RAS

When did you last pay any of them?

And would you have some money to put aside regularly in case they offered a full and final settlement?

Maskface

Perhaps your first option should be to go through it with a debt charity like Stepchange.org to get free advice before deciding what to do. Statute barred will only be reached if there's been no co tact from them for 6 years, the fact that you know who the creditors are and rough amounts owed suggests there's been much more recent contact? Discuss your options with stepchange first before working out a way forward.

jamiesmack

Maskface said:

Perhaps your first option should be to go through it with a debt charity like Stepchange.org to get free advice before deciding what to do. Statute barred will only be reached if there's been no co tact from them for 6 years, the fact that you know who the creditors are and rough amounts owed suggests there's been much more recent contact? Discuss your options with stepchange first before working out a way forward.

Thanks for the reply. I have had a couple of letters, and can see who the creditors are on the credit karma report. I thought statute barred was from the default / last contact acknowledgment of the debt? I didn’t think their contact to me mattered. 

I have contacted stepchange who suggested I start bankruptcy proceedings. They said that sending a prove it letter was not adviseable so hoped that some info from some others who have been through similar would help.

jamiesmack

RAS said:

When did you last pay any of them?

And would you have some money to put aside regularly in case they offered a full and final settlement?

Last payments seem to be March / April 2018. No money readily available at the minute, but could possibly source some from family, once again shamefully. 

Stepchange indicated that they wouldn’t offer to settle, but would at best offer to partially settle, which would still be on my report etc? 

RAS

So you are looking at another two years before the debt becomes statute barred? As long as you have not communicated with them mean-time.

Surprised stepchange suggest bankruptcy for that sum. If you are on a low income/limited excess income over expenditure a DRO might work.

Less that £30K owed, no assets like a house or car over £1000 (maybe £2K now) and less that £75 per month excess income.

The other option is to is check out DRO/bankruptcy options but hold off unless it looks like they are really going for a CCJ?

sourcrates

The default date is the cause of action date yes, however if you have been paying them up till 2018, that re-sets the time barred clock, so yes, another two years until you can claim statute barred.

If things are tight financially, then by all means write and tell the companies concerned, affordability is everything these days.

The trend these days is to not make debtors pay what isn`t affordable, otherwise, if things heat up, look at debt management, or a DRO as suggested earlier.

Maskface

jamiesmack said:

Maskface said:

Perhaps your first option should be to go through it with a debt charity like Stepchange.org to get free advice before deciding what to do. Statute barred will only be reached if there's been no co tact from them for 6 years, the fact that you know who the creditors are and rough amounts owed suggests there's been much more recent contact? Discuss your options with stepchange first before working out a way forward.

Thanks for the reply. I have had a couple of letters, and can see who the creditors are on the credit karma report. I thought statute barred was from the default / last contact acknowledgment of the debt? I didn’t think their contact to me mattered. 

I have contacted stepchange who suggested I start bankruptcy proceedings. They said that sending a prove it letter was not adviseable so hoped that some info from some others who have been through similar would help.

No, statute barred is from the point of last contact so you're a way from that still.

Maskface

Thinking about it, my total debt was £12,800. I settled for £6,800 which showed as partially settled on my credit report but just 6 months later I now have 7 credit cards, an overdraft and 4 catalogues so even in your case having things recorded on your credit file may not necessarily be the end of the world. 

As an example I owed one credit card £3,500 and they settled for £1,200. I was shocked just how low they were prepared to go when I asked what the least they would accept was. It may be worth contacting the creditors seeing as you're unlikely to be able to use statute barred and ask them what the lowest amount they will accept is. 

Some of mine were even prepared to accept a small amount and take monthly installments on it. They were surprisingly approachable and accomodating with my offers. If ccj is the worst case scenario then you don't have much to lose by trying for a reduced settlement. At least then if you do need to ask family it won't be such a huge shock for them and you might even get instalments. 

jamiesmack

One quick question on statute barred, with me being a couple of years from that. 

I do get relatively frequent emails / letters from them. Are they likely to let this go over the statute barred time or will they press for ccj closer to the time?

how do accounts end up being statute barred? Are they accounts that the company’s have missed or something?

sourcrates

jamiesmack said:

One quick question on statute barred, with me being a couple of years from that. 

I do get relatively frequent emails / letters from them. Are they likely to let this go over the statute barred time or will they press for ccj closer to the time?

how do accounts end up being statute barred? Are they accounts that the company’s have missed or something?

We have Government legislation in this country which makes sure we cannot be chased for bad debts "Aeternum" (forever), its referred to as the Limitation act (1980), and section 5, is the relevant source of this information.

Imagine how many credit products there are on the market, and how many customers have 2/3 or more credit products to service, now the majority of those manage to service their debts ok, but a very large percentage don`t, and end up defaulting.

These defaulted accounts total into the millions, so it would be impossible for debt collectors to chase every defaulted or non paid account, so focus tends to be on the easy pickings, and the slightly more complex accounts get put on the back burner.

A creditor has 6 years in England and Wales (5 years in Scotland) to chase bad debt, the date of default is usually the "cause of action" date, or when the time clock starts ticking, but it can also be the date of last payment or written acknowledgement as well.

Not every debt can be chased within the 6 year time frame, lots are missed, for various reasons, however if a creditor is in contact with you, and your account is nearing the 6 year mark, and you continue to ignore them, then legal action to secure there interests gets more likely, if your already paying what`s affordable, the risk of legal action drops to around zero.

And to put all that into perspective, less than 15% (up from 12% a few years earlier) of defaulted debts ever see legal action (2020 figures).