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vincentcalhoun

'Extinguished'- the debt itself or the legal obligation to pay?

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My understanding of the word 'extinguished' in Scottish law regarding debts 5 yrs old or more is that it is the legal obligation to pay which becomes non-existent, rather than the actual debt itself. What I mean is, although you no longer have to pay the debt and nobody can legally compel you to, the debt is still in existence assuming you did actually borrow the money at some point and not repay it.

 

Is my understanding correct? Or are all my unsecured debts (over 7 yrs old with no acknowledgement/payment from me or court action taken by creditors during this time) actually non-existent? Do DCAs have the right to hold information about my old debts and sell it on even if they know perfectly well it is statute barred?

Edited by vincentcalhoun
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Good question vincentcalhoun. My understanding is the same as yours. A debt may well be statute barred after 5 years but it would not prevent a lender recording adverse credit history against you. Typically this would be for internal purposes and probably has no time limitation. I dare say this is no different for you or I. “remember that £5 I loaned Jimmy when we were on a night out in 1975? Well he never repaid it so I’ll never lend to him again” That said I also understand that anything placed on your credit file is removed after 6 years. Now what I do not know if this 6 year status is wrongly quoted using English Statute because as you quite rightly say in Scotland it is only 5 years.

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Yeah, you'd think us tight gits up in Scotland would make it about 30 yrs to recover a debt, considering our stingy reputation hehe.

 

I think you're right, all my original creditors probably do have some internal record of me, and that's fair enough, it's just the DCAs selling my information back and forth that concerns me, as I could still have to be writing statute barred template letters into my old age!

 

My credit report had some defaults on it, although that was in Autumn 2008, when I checked back around 7 months later it was clean as a whistle, that was because the 6 year limit had been fulfilled. The limit for adverse credit history on your report is 6 yrs in Scotland and England, it's just the Scottish are a wee bit luckier in only having a 5 yr limit on their debts :D

 

I just wish I knew how to get these people to stop passing on my info. If it turns out my understanding has been wrong, and it is my debts which are truely 'extinguished' and non-existent, rather than my legal obligation to pay them, then I think DCAs cant have any right to keep selling my personal information to companies which they know will harrass me illegally. I wish I could get clarification on this!

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Just thinking out the box for a moment, but surely you can stop a DCA in their tracks by advising then of yor familiarity with Office of Fair Trading's Guidance on debt collection such as ceasing collection activity on an unrecoverable, reasonably queried or disputed debt.

 

By raising a dispute over the matter they would have to cease action and knowing it was irrecoverable could do nothing more. As such any action will undoubtedly be construed as deceptive and unfair methods which would allow you to register a formal complaint. This could put in jeopardy their consumer credit licence and with it their ability to function.

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