how old a debt before written off

[gordonhall]

I'm sure this has been answered a million time already, but I can't see it anywhere!

Anyway, a friend yesterday received a letter from a debt collection agency for a debt of £250 (approx) which origianlly came from sky.

The debt stems back to over 7 years ago, at a previous address. She has never been informed of this debt previously, depsite still having a sky package in all this time.

Is there a maximum amount of time that these companies can chase debt, or is it an unlimited period?

I would have thought a judge would throw it out if sky had never tried to recover their losses in all this time, especially as the person has always had a sky account, just moved to a new location.

[comanche]

Are they trying to recover this debt under a different agreement number from the one she currently has?

[gordonhall]

I don't really know. From what I was told, the letter just came out of the blue from the debt collection agency, but no paperwork to substantiate the claim.

Having never had Sky, I don't know how they operate when moving house, but I know my friend well enough to know that if there was a debt owing, she would have paid.

[gordonhall]

thinking about it, one would have to assume so, otherwise they could have just added the "missing" sum onto the current account??

[comanche]

Yeah, that's what I think as well. If so then, assuming that she's made no contact and made no payment in the last six years, then the debt should be statute barred. I wouldn't put it beyond them to try to link it to her current account but I don't think that would work.

[gordonhall]

thanks seminole. I shall pass on the necessary info in the morning.

[pekingman]

Originally Posted by seminole

Yeah, that's what I think as well. If so then, assuming that she's made no contact and made no payment in the last six years, then the debt should be statute barred. I wouldn't put it beyond them to try to link it to her current account but I don't think that would work.

Your help most appreciated re. debt write-offs: I had an overdraft with NatWest, which accrued when student loan payments were made without me knowing. (I left the UK to live abroad and asked my mother to send the deferral form in for me and she forgot so the loan payments were being made) When I realised, the bank asked me to take out a loan to pay it off. From a 800 pounds overdraft, they were asking me to take a loan of 1400 pounds. I didn't sign the application form they sent me. Instead I wrote a letter asking how they calculated this figure and how I could make a one-off payment. They never replied so I wrote again. No reply. A friend told me not to worry since after a certain amount of time the bank will write off the debt. Almost 5 years have gone past, and I recently moved house again (still abroad) and found the old NatWest letters. Should I contact them? Will the debt be written off? Will it be even bigger and growing? I know they were going to levy 29% interest per year and add charges per month.

[Jeff2000]

Hello pekingman,


It's a tricky one. It depends on your objectives!

Do you agree with the "alleged" debt, and therefore would like to pay it off?
(Don't forget, it is only an alleged debt at this point).

Or are you seeking for it to become statute barred?

If you contact them now, and either acknowledge the alleged debt in writing, or make a voluntary payment towards the alleged debt, you will restart the six year clock!

Whereas, if you wait until after six years since any acknowledgement or payment, then it becomes statute barred.

Once this happens, you cannot restart the clock with acknowledgment or payment! (Not that you would!)


Best wishes, Jeff.

PS. You should start your own thread in the debt collectors, or general debt forum! You will get more response and help!

[Shoestring]

Banks are required to write off debts once they are considered to be "non-performing" (i.e., a bad debt where interest is not being paid in a timely or regular fashion). Usually this is a decision made in conjunction with the external auditors dueing the annual audit. At that point, the debt is "written off" the balance sheet but not necessarily forgotten. The bank have a bad debt department which is regarded as a profit centre where old bad debts are collected if possible. Since the actual debt has been written off as a loss on the the Profit and Loss account, any amount recovered is regarded as a "profit" in the current year.

I once knew of a board level director of a major British bank who was aksed to take charge of a loss making division of the bank. For agreeing to do so, he got the boards approval to write off all their bad business immediately. This way, he arguedm his future performance could be judged accurately and would not be tinged with past poor lending judgements. Tens upon tens of millions were written off.

For the next five years or so the division he took over recorded record profits year on year. He retired a hero and was awarded a sort of roving ambassadorial post representing the bank at all sorts of overseas events/functions, that required a lot of overseas travel (first class, five star, all the way, of course). A nice little "earner" and fully paid for holidays for his retirement years.

It was later learned, accoirding to what I was told, that the tens upon tens of millions he had written off as a condition of taking the job hadn't all been bad debts. Not by a long shot. In fact, a large pecentage were "collected" as required over the next few years and "filtered" back into the annual Profit and Loss to suit annual reported earnings. In effect the gentleman hadn't needed to do anything with his years in charge and his "performance" was guaranteed due to his foresight and cunning.

There's nothing so sly as a senior banker intent on gaining favour, promotion and healthy bonuses. Any reading of major Wall Street scandals over recent decades spell it all out for the attentive reader.

Shoestring.

[Jeff2000]

Originally Posted by Shoestring

Banks are required to write off debts once they are considered to be "non-performing" (i.e., a bad debt where interest is not being paid in a timely or regular fashion). Usually this is a decision made in conjunction with the external auditors dueing the annual audit. At that point, the debt is "written off" the balance sheet but not necessarily forgotten. The bank have a bad debt department which is regarded as a profit centre where old bad debts are collected if possible. Since the actual debt has been written off as a loss on the the Profit and Loss account, any amount recovered is regarded as a "profit" in the current year.

I once knew of a board level director of a major British bank who was aksed to take charge of a loss making division of the bank. For agreeing to do so, he got the boards approval to write off all their bad business immediately. This way, he arguedm his future performance could be judged accurately and would not be tinged with past poor lending judgements. Tens upon tens of millions were written off.

For the next five years or so the division he took over recorded record profits year on year. He retired a hero and was awarded a sort of roving ambassadorial post representing the bank at all sorts of overseas events/functions, that required a lot of overseas travel (first class, five star, all the way, of course). A nice little "earner" and fully paid for holidays for his retirement years.

It was later learned, accoirding to what I was told, that the tens upon tens of millions he had written off as a condition of taking the job hadn't all been bad debts. Not by a long shot. In fact, a large pecentage were "collected" as required over the next few years and "filtered" back into the annual Profit and Loss to suit annual reported earnings. In effect the gentleman hadn't needed to do anything with his years in charge and his "performance" was guaranteed due to his foresight and cunning.

There's nothing so sly as a senior banker intent on gaining favour, promotion and healthy bonuses. Any reading of major Wall Street scandals over recent decades spell it all out for the attentive reader.

Shoestring.

Hi Shoestring,


Hmmm! Very interesting indeed!


Jeff.

[Shoestring]

Glad you found it so.

You might want to read the following... Citibank, CSFB and Merrill Lynch are just about the three biggest players in Wall Street. They are also very, very powerful in London, too.

frontline: the wall street fix: interviews: eliot spitzer | PBS

Funny how the US is so corrupt, but does sometimes put its house in order, whereas over here these things never seem to get a proper airing...

Shoestring

[Jeff2000]

Originally Posted by Shoestring

Glad you found it so.

You might want to read the following... Citibank, CSFB and Merrill Lynch are just about the three biggest players in Wall Street. They are also very, very powerful in London, too.

frontline: the wall street fix: interviews: eliot spitzer | PBS

Funny how the US is so corrupt, but does sometimes put its house in order, whereas over here these things never seem to get a proper airing...

Shoestring

Hi,

Yes, but isn't it strange that it's mostly the American companies that seem to think they are above the law over here!!!?


Jeff.

[Shoestring]

They are by no means entirely alone, but I agree with your sentiments in general. The US has had a more motley history of organised crime interviewing with big business and banking, as do various intelligence agencies under shade of deniable front companies. The purpose of the latter is to garner easy and copious revenues that are beyond Congressional scrutiny and can therefore be used in all manner of illegal and sordid (but deniable) operations. The more usual methods are "pump and dump" stock price inflation scams plus a plethora of activities involving fraud and embezzlement etc., that purloins money from the innocent "investor".

But don't be fooled and think that good old British (or old European) banks and companies are beyond this sort of activity either. England has a far older banking history than the US. Likewise Italy -- one reason why the one-time banking street in the City of London (Lombard Street) was named after the Venetian "Lombardy".

Shoestring