How long can my creditors chase me?

A question that I often come across from people struggling to pay their debts is ?how long can my creditors chase me?? The answer is until you have paid them what you owe. However, if communication between the debtor and the creditor breaks down and enough time elapses, then the debt can be un-enforceable. Let me explain?

All creditors have a fixed period of time, as stated in the Limitations Act of 1980, in which that they can pursue a debtor for a debt. The act states that unsecured debts, such as credit cards, store cards, overdraft, bank loans and catalogues, become ?statue barred? if there has been no contact between the two parties within a six year period. The creditor has not already obtained a judgment against you

and

You, or anyone else owing the money (on a debt in joint names) have not made a payment on the debt during the last six years

and

You have not communicated to the creditor admitting you owe the debt during the last six years.

After six years if the creditor makes contact with the debtor and asks for a payment, the debtor does not have to pay them.

These instructions do not apply to debts in Scotland. Under Scottish law, if a lender allows time to pass without receiving any payment an action for recovery may become barred under the Prescription and Limitation (Scotland) Act 1973. (For details of this Act see Gloag and Henderson 12th edition at Chapter4.). These debts are completely extinguished and cannot be enforced. Once the prescriptive period expires the debt cannot be allowed as a deduction.

To explain it further here is a possible scenario?

You take out a credit card, after a period of time you lose contact with your credit card provider and stop payments. You then receive a letter from them to say they want you to resume payments and clear the debt. The time period between your last contact with the creditor ? whether it was a payment made, a letter or a telephone conversation ? has been six years, this means that the debt has become ?statue barred? and the creditor is no longer allowed to pursue you for payment or take any further legal action against you.

If a creditor continues to contact you once the debt becomes ?statue barred? then you are entitled to report them for harassment, as well as making a complain to the Office of Fair Trading.

Written by Gemma on March 20th, 2012

Filed Under  debt advice   |  Trackback  |   Leave a Comment

View the original article here

Posted in: chase,creditors