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Subject: Statute of Limitations: The law relating to debts

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The Wellman Partnership LLp
Posts:0

08-11-2007 9:03 AM	Alert
If anyone has recently received contact from debt collection agencies about dormant debts from the dim and distant past then check out the link below for the law regarding debts that are more than six years old. http://www.hmrc.gov.uk/manuals/IHTmanual/IHTM28384.htm from this it can be derived that if you've received a letter from a company regarding old debts IGNORE IT, DO NOT CONTACT THEM and especially DO NOT ACKNOWLEDGE THE DEBT as this will start the time limits all over again This is unless of course you are happy to repay the debt then disregard what has been written here. Also please be aware of people or organisations that could take oportunities like this to run scams playing on peoples ignorance of the law and memory to relieve you of your hard earned.

The Wellman Partnership LLp
Posts:0

08-11-2007 9:29 AM	Alert
Just to simplify the link above, The way the statute of limitations comes into play at different times regarding different debts, for any land related debts such as mortgage shortfalls the creditor has 12 years from when default has occured to take the matter formally through the courts. For unsecured credit cards and loans the period is 6 years from default to take the borrower to court. If the relevant period is reached without court action being taken then they lose the right to do so forever. If a summons is issued prior to the six year term it’s a standard defence as it’s already a statute barred debt no court action or order can be taken or made. They can chase a debtor for the money and they would still owe it. The debt would still exist, they would still be liable, they can still be asked to repay it and it can still be re-registered on their credit file time and time again if it remains unpaid, the only change is the person cannot be forced to repay it any longer. Ultimately if someone wishes to borrow again in the future then an old debt registered on a credit file could present a challenge. If this is so my suggestion would then be to make an offer of a full and final settlement. This is of course only if it does adversely affect your credit rating. Good fortune everybody Gary Wellman The Wellman Partnership LLp www.wellmanpartnership.co.uk

The Wellman Partnership LLp
Posts:0

08-11-2007 9:45 AM	Alert
My apologies but here's a bit more! If the creditor has been to court and there is a County Court Judgment outstanding, then the debtor cannot use the statute of limitations to dispute they owe the debt. It does not matter how many years ago the creditor went to court, the CCJ will still exist. However, the creditor may not be able to enforce the Judgment without the court's permission if the Judgment is over six years old. If the debtor thinks the creditor has been to court and got a County Court Judgment against them after the debt is out of the six year limitation period, then they can ask the court to "set aside" or remove the County Court Judgment so you can put in a Limitation Act defence. For people who aren't confident doing this on their own the best option would be to seek professional assistance. Gary Wellman www.wellmanpartnership.co.uk

Debbie Baker
Posts:109

11-11-2007 4:20 AM	Alert
Excellent post Gary. Thank you for your time on this, it is good to know we have such good professionals established on this site to inform us all.

Kind Regards Debbie Baker Tip Consultancy - Financial Recovery Specialists 07790 533884

Johnny Debt
Posts:209

12-11-2007 12:38 AM	Alert
Hello Gary and welcome to the site. Thanks for this excellent contribution.

Johnny Debt 07870 492521

Tina Bessant
Posts:3

11-01-2008 6:53 AM	Alert
thank Gary, I have just been hit with a debt from 2000 which i answered that it wasn't mine, I did think it was out of time, so it looks like it is so i will now ignore it. Its only £103! wish it was mine and i could swap it for some others I have that I can't get out of! if i lent someone money in 1997 and they admitted in writing through a solicitor that they owed it, then the solicitor stopped civil trading and dropped the case. Since then any contact has been verbal and he always says he would pay it when he has the money. 2005 was the last conversation. I then found out he had moved house and could have paid me when he sold the house (that the money was lent for). I have now found out where he lives but all paperwork is out of date, does a verbal contract count?

Gary Wellman
Posts:5

14-01-2008 8:42 AM	Alert
Hi Tina, In a word YES a verbal contract is legally binding as long as you and the borrower agreed the terms of the contract. From what you've written the original written contract is outside of the limitation act which means you haven't anyy recourse for legal action. If when you spoke with him in 2005, he acknowledged the debt then the limitation act does not apply and you have grounds for legal action. However you need to prove that you have spoken with him and that an acknowledgement was agreed. If you agreed a new verbal contract with him on the telephone then it stands as legally binding as long as you agreed on all points of the contract i.e. money owed and when it was to be paid by etc.. If it was subject to contract then it has no legal standing. The best thing to do would be to speak with a solictor and see if you have a case. Hope this helps Gary The Wellman Partnership LLP www.wellmanpartnership.co.uk 01202 462781

Gary Wellman

Tina Bessant
Posts:3

17-01-2008 6:07 AM	Alert
Soz Gary, just found my way back to this! The problem i will have is proving it. As it was a conversation between us with no witnesses. i did tell people, but as they wern't there its just my word i would think.

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