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Statute Barred - Worrying 'loophole'?

PostPosted:Wed Jan 02, 2019 9:26 pm
by Matamanoa
I wanted to share the following from a friend who thought his debts were statue barred. It's copied directly from an email. It worries me as I have my own long-standing debt problems. I'd appreciate your comments. Thank you.

What happened to me was (as always) the exception to the rule so during this fun time, I became a cheap suited Philadelphia lawyer with debt as a specialist subject.
Having said that, don't take anything I say as gospel. I was told by 2 solicitors and a barrister that I had nothing to worry about.
Then the barrister who attended the High Court with me told me on the day, "Your'e ******" (but more politely).
After 15 years, an £11,500 debt (with interest) turned into about £168,000!
And I was liable.

Here's the rule that got me. 6 years for unsecured debts and 12 years for secured debts - that's supposed to be the time limit on recovery.
The small print is... 6 or 12 years after you have received an official demand for full payment! - Until the demand, the clock hasn't started ticking!

According to the papers served by the ******* who had bought our debt, there was documentation to prove the lender didn't officially demand full and final payment until 11 years and 11 months and 3 weeks before our high Court summons. And I didn't keep any correspondence to prove otherwise.

So, if you have some proof of demand, keep it

Re: Statute Barred - Worrying 'loophole'?

PostPosted:Thu Jan 03, 2019 2:37 pm
by Hayden
Hi Matamanoa

As far as I am aware for a debt governed by the consumer credit act (eg loan or credit card debt) the start date for becomming statute barred begins on the date the creditor is able to take legal action to recover their money.

This is the date they have a ‘cause of action'. It would normally be stated in the contract and would be for example after two or three missed payments. As such it does not follow that they have to have issued a demand for payment. They would have cause of action without doing that.

However if there are debts with no fixed repayment period such as an agreement between individuals which does not require set repayments it can be more difficult to establish when the limitation period begins.

Perhaps the situation you have highlighted with your friend is this type of debt? It might be worth asking them. I am no lawyer but if the debt was standard banking debts I do not believe they would have had this problem.

Re: Statute Barred - Worrying 'loophole'?

PostPosted:Thu Jan 03, 2019 7:39 pm
by Matamanoa
Thank you for the reply. It's much appreciated. I'll certainly get back to him and ask for more details.

Thanks.

Re: Statute Barred - Worrying 'loophole'?

PostPosted:Fri Jan 04, 2019 12:01 pm
by Hayden
No problem at all Matamanoa

I have just thought of the following addtional info that you might find useful:

One way a creditor can extend the period before a debt becomes statute barred is by applying for a CCJ (County Court Judgment). They can do this right at the end of the 6 year period and if the CCJ is awarded by the Court the 6 year period has to start all over again. In this way a savey creditor can extend a period before a debt becomes statute barred to 12 years.