Lowell Financial / Portfolio / whatever they're called..

[rory32]

In August 2007 I received a letter from these chumps asking for repayment of a debt they had bought from HSBC for an unpaid overdraft of an account I held back back around 2001.

Between 2001 and 2007 did you acknowledge this debt in any way either by making an offer of payment or a payment towards the account? If the debt has not been acknowledged for a cotinuous period of 6 years then it is statute barred.

However after doing some research I've learnt that paying off the debt might not remove the default notice from my account, which puts me back to square one.

Correct. The default would be simply marked as satisfied which in reality doesn't really change your credit rating. If you are to come to a settlement you must make the default removal a condition of the settlement and have Lowell's acceptance confirmed in writing.

I'm in the process of drafting a CCA letter

An overdraft is running account credit but the agreement is different for overdrafts than for other credit agreements. Section 74 of the Act allows for certain types of agreement to be excluded from part V (form and content) where the OFT has so determined. This detemination (the Determination) regarding overdrafts under section 74 was made on 21 December 1989 subject to three conditions.

 

(a) That the creditor shall have informed in writing the OFT of his general intention to enter into agreements to which the Determination will apply;

 

(b) that...the debtor shall be informed at the time or before the agreement is concluded

- of the credit limit, if any;

- of the annual rate of interest and charges applicable from the time the agreement is concluded and the conditions under which these may be amended;

- of the procedure for terminating the agreement

and this information shall be confirmed in writing.

 

© that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than 3 months, the creditor must inform the debtor in writing no later than 7 days after that 3 month period of the annual rate of interest and charges applicable.

[rory32]

But if nanj has been making payments after the 6 years does that not start the ball rolling again?

 

No. Once a debt is statute barred it remains so. It can not be unstatute barred.

[rory32]

What does statute barred mean?

Once a debt is statute barred you have no legal obligation to pay it.

Thinking about it now however, the last time I spoke to HSBC about the account must have been in late 2002/early 03 when I visited a branch and they told me the account had been closed and been passed to the their debt collectors.

This does not constitute acknowledgement.

How do I check how long it has been?! My credit report states that Lowell issued the default in 2004..

Send template M from here You'll need to modify it a bit to suit your circumstances.

In regards to the debt being an overdraft, apologises Rory but I got a bit lost in the legal stuf you mentioned! Should I still draft the letter using the standard template on this site?

It doesn't really cover overdrafts as they have an exemption. The copy of the agreement for overdrafts would just be a letter from the bank.

[rory32]

The emphasis is always on the creditor to prove that the account is not statute barred. London Congregation Union Inc v Harriss and Harriss [1988] 1 All ER 15, CA at 13.3)

[rory32]

Regarding the rather late default placed on you file the following may be of interest (particularly point 11) http://www.experian.co.uk/www/pages/downloads/compliance/guidance_on_defaults.pdf

[rory32]

Regarding letter 'M' in the templates, given the fact that I have indeed been making payments, 11 now all together I believe, will this not remove the statute bar from the debt as I have acknowledged it and begun repayments?

 

Debts can not become unstatute barred. Once the debt is statute barred it will always remain so.

 

Regarding the default I would initially complain to the ICO about the default years later. This won't necessarily remove the default but it will start the ball rolling in the right direction.

[rory32]

The letter above you will have to modify due to the circumstances of the account. If you need help with this let us know.

[rory32]

Okay. Let me have a think about it as it is rather late now and I'll post tomorrow if no one beats me to it.