How long can conumser debts be legally chased?

time-4-a-new-start

Hi

I was looking to get a bit of advice.

I entered a DMP back in 2011. After initially repaying a smaller amount for 5 years, I was able to work with most of my creditors (original and those the debt was sold to) to arrange a final repayment to close the accounts in 2018/19.

One creditor (who is the 3rd owner of the debt after it being moved a number of times), did not accept the final payment offer to close the account.

This year – 14 years after the first default and when the DMP officially started - the same creditor has started to send letters looking payment. This has now resulted in the typical we will send someone out to visit you etc.

My questions Im hoping someone can help with are:

1. legally how long are creditors allowed to chase a debt? I thought it was 6 years from when the first default started to when they were statute barred (the debts were personal finance, not mortgages etc)
2. If that is the case, is it worth replying back to the creditor to remind them or should I just ignore?

Many thanks

sourcrates

You are correct, its 6 years from the date of default, or, the date of last payment or written acknowledgement.

However, the limitation act is not as rigid as it could be, section 5, states:

"An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued".

That doesn't stop these companies from chasing you unfortunately, sometimes for years after they became statute barred.
To stop collection activity, you must send them the statute barred letter, telling them the debt is statute barred.

After that they are supposed to agree, or tell you why they believe it isn't barred.

FCA have clarified this in recent times, they are not supposed to continue collection activity once notified.

Brie

I agree with what sourcrates says.

So assuming you haven't been talking to this final creditor nor making any payments since the decided to ignore/refuse your final offer in 2019 then the debt would become statute barred this year.  If you haven't paid/talked to them since 2018 it should already be statute barred, in my opinion. 

Working on the assumption that is was 2019 then they are likely trying to make a final attempt to get some money out of you.  The actual dates on this may be critical.  You could try simply ignoring them to play for time and then when they write again send them the statute barred letter by snail mail.  Certainly don't admit to anything, don't phone them, don't email them.  Deal with them exclusively by post.   

fatbelly

So you made pro-rata payments to your creditors from 2011 to 2016 and then settled most of them in 2018/19.

I assume you wrote to this one to make offers  in 2018/19. Had you already stopped making payment?

When do you think was the last time you either wrote or made a payment to it?

time-4-a-new-start

Thanks all for the input.

Just to firm up some dates in my comms with them:

• Last payment made - Aug 2018
• Final offer made - Feb 2019
• Last time I wrote - Jan 2020 (not related to DMP but about an Ombudsman compliant)

I found a useful template on StepChange that they suggest sending to not admit liabilty for the debt and ask them to prove otherwise - https://www.stepchange.org/Portals/0/documents/info/Statute-Barred-Template-Letter.pdf?ver=2016-04-14-162947-590

On this one, the debt has moved between the org creditor, then 3 different collection agencies. This current collection agency has owned it since 2019.

ManyWays

Last time I wrote - Jan 2020 (not related to DMP but about an Ombudsman compliant)

In that case this debt may not be statute barred until 6 years from that date.

Do you remember what sort of debt this was, card, loan, overdraft etc? 

time-4-a-new-start

Credit card and personal loan

fatbelly

So it may or may not be statute barred depending on whether the Jan 20 letter can be construed as an acknowledgement.

Ideally we want to get through the next 9 months (without you acknowledging the debt and them starting a court claim) before you start sending letters from the stepchange website

At the moment all they are doing is suggesting a visit. Let them. Ignore their letters. Ignore their rep. Not a bailiff at this stage. Just a fancy hand-deliverer of a letter.

They may be unsure themselves whether this is statute barred and so may not be willing to risk a claim but just see how far they can push you. There is another thread like this on the go at the moment.

You said this was 'credit card and personal loan'. Are these being pursued as two separate debts or have they been combined under one reference?

time-4-a-new-start

Hi

I was 2 separate debts with 2 references.  

The original default on both was 2011. The communication in 2020 was part of a message on a complaint against them with the FCA

RAS

6 clear years after the default,  last payment, or written acknowledgement. As fatbelly says, try to ignore them for the next 9 months.

They are defining the last written acknowledgement as Jan 2020, even if you don't see it that way. You could argue, you might win, or might not. But that argument could end up as written acknowledgement.

ManyWays

I agree ignoring them is the best at the moment. But if you get a Letter Before Action (long letter with forms attached) then you should make sure you ask them to produce the CCA agreement for the two debts. If they cant, that is a reason why the debt may be unenforceable if statute barring isnt going to work