Defaulted credit card query

time2change_2

I have been paying debts off over the last 18 mths and am about to start on the last one which defaulted in Nov 2016. No interest is being added and it's not being chased as such but I do get a statement each month. I will pay it all off in the end but haven't started on it yet.

It shows on my credit file but if I understand it correctly it will drop off in Nov this year. My question is if I start paying now (even token payments) will that change anything, in particular will it mean the card stays on credit file.I am wondering if it might be worth putting the money aside but not actually paying anything off it until after the 6 years are up in 3 ish months. 

Ebe_Scrooge

time2change_2 said:

My question is if I start paying now (even token payments) will that change anything

Debts become statute-barred 6 years (5 in Scotland) after you last acknowledged the debt.  So if you make a payment now, the clock starts ticking again for another 6 years.  Stepchange have an article which may help to give a more detailed explanation : https://www.stepchange.org/debt-info/can-i-write-off-debt/statute-barred-debt.aspx

time2change_2 said:

I will pay it all off in the end but haven't started on it yet

However, if you're planning on repaying the debt (which is morally the correct approach, without a doubt) then it makes little difference.  From a personal point of view, I would have thought the quicker the debt is cleared the better, then you can get on with your life and not worry about it.  And a huge thumbs-up to you for taking this approach

sourcrates

Defaulted accounts drop off your file after 6 years regardless of what you or anyone else does.

fatbelly

But are you saying that you have made no payment since it defaulted in Nov 2016 and all you get is statements?

If so, I'd leave it alone.

Token payments would be a particularly bad idea.

There's every reason at this point in time to save a fighting fund if you are able to.

sourcrates

It will become statute barred around November this year, why waste your money.

I`m with fatbelly on this one.

time2change_2

Thanks everyone for your replies - although I appreciate what people are saying I'm not inclined to just walk away from it. I am now in a position to repay it over time.

I am slightly concerned that the creditor might do something before it becomes statue barred anyway and whilst I can pay it over time I can't pay it all at once.

sourcrates said:

Defaulted accounts drop off your file after 6 years regardless of what you or anyone else does.

This was the main bit I wanted to know.

fatbelly

They can't do anything suddenly. A court claim gives you 14 days to respond, 28 if you acknowledge service.

Before that they are required to give you a pre-action letter with a 30-day response time.

It's August. If they were going down the court route, it's likely they'd have started the process by now.

If you acknowledge the debt you restart the 6-year clock

RAS

Hi

If you want to pay it off, for your own sake and can't do it immediately. Stop look and listen.

Don't prod the creditor. Just start putting money away into an account towards the debt.

Once it's state barred and you know they can't suddenly pull a CCJ on you, then start making payments. If they come back to you, maybe ask for a full and final settlement figure?

time2change_2

Thank you fatbelly and RAS for those replies they are really helpful. Especially the timescales 

I will put the money aside for now, there is no point prodding the creditor at this late stage I agree.

sourcrates

RAS said:

Hi


Once it's state barred and you know they can't suddenly pull a CCJ on you, then start making payments. If they come back to you, maybe ask for a full and final settlement figure?

That simply isn`t how the Limitation Act works, the creditor can go for legal action at any time, statute barred or not.

You must use the fact that its statute barred, as a defence to the claim, otherwise a CCJ by default can, and does get granted, this applies to the whole of the UK, except Scotland, the Scots don`t mess about, after 5 years the debt is extinguished up there, nae bother.

You must choose a course of action and stick with it, either wait until its past limitation, then inform them in writing of such, and keep on walking, or lose your rights and start paying it now.

Any payment or written acknowledgement will re-start the time clock, creditors won`t offer much in the way of settlement for an SB debt, most prefer to take the lot or nothing.

Your principles are one thing, but don`t let them fly in the face of common sense.

Rob5342

I'm with Fatbelly too. I'd put improving my financial security way above satisfying any moral obligation I thought I had, only the first would benefit me if I lost my job.