Defaulted after…. 5 YEARS?

DisneyDarling

Hi, really odd one. 

Applied for a mortgage through a broker, all going well until I’m told we have a payment which is in ‘unknown’ status on our file (this didn’t show up on 2 out of 3 reference agencies so we weren’t aware). 

I contact the company to find it’s a debt of over £6K from 2020.
I know what it is (finance car, voluntarily ended) but company stated we were still liable for £6K despite returning. 

5 years have pass, we never heard a thing back from them. Assumed our complaint was successful and they closed the agreement. 

Mortgage lender asked us to confirm the status of the loan so I called them this week. They confirmed the account was with ‘recoveries’ but it hadn’t defaulted etc. I agree a payment plan to pay it off, no worries. 

Today I receive this letter in the post…. 

Is this allowed? Applying a default in retrospect for 5 years ago?

thanks!

fatbelly

i think yes. It would be a problem if they reported a default with today's date but they are backdating it to March 2020 so it will drop off in March 2026.

I wouldn't be in a rush to repay it because if you haven't acknowledged the debt by payment or in writing since that date then it also becomes statute barred next March

retiredbanker1

Isn't he a bit late for that - agreed a payment plan - suggests he acknowledged the debt.

fatbelly

Depends. Was it done in writing? Was a payment made? You can't acknowledge verbally.

The op's grammar is more vague than yours - I agree a payment plan - so I don't know the answers to those questions

Keep_pedalling

What part of the UK are you in? If Scotland it is already statute barred. 

Allister2025

I wouldn't be in a rush to repay it because if you haven't acknowledged the debt by payment or in writing since that date then it also becomes statute barred next March