guarantor being chased for old debt

[k4t1e2]

hi yet another newbie...

 

i have read most replies on this thread and it ace the information and advise people are providing! but mine may be a bit different and I was wondering if someone can shed some light on this to help my poor mum!

 

my mum took signed to be guarantor for my brother for moped finanace with black horse when he was 16 (nearly 12 years ago!). after time the moped was stolen and altho my daft brother had insurancde it didnt cover him (some clause but i dont have full details and it was about 10 years ago now.

 

by the by, since then my stupid brother has been backwards and fowards with his payments, paying them, not paying them, back paying what he owed and he eventually stopped (not for 6 years tho!). now, our of the blue, my mum is now being pestered for the money. Horrible phone calls, threatening letters saying they will take her to court. She has told my brother about this and he still isnt going to pay (other issues as well, but he well out of order).

 

my mum has now set up a payment scheme to pay them £10 per month by cheque and has advised she is no longer going to speak to them via the telephone coz of their attitudes so they do contact my mum by letter now.

 

is there anything that my mum can do to deal with this? she doesnt have much of a relationship with my brother anymore and does not want to be paying this debt for him when he earns more than enough!.

 

any advice would be very much appreciated!! katie ;0)

[dx100uk]

k41te2 i'll get a new thread started for you

 

dx

[MARTIN3030]

Welcome to the site Katie-now you have your own thread.

[JonCris]

Payment does NOT invalidate the limitation act The debt is now timed barred

 

The only thing which could have invalidated the act would have been if a CCJ had been obtained BEFORE the 6 years expired

[Revenant]

Tell your mum NOT to send cheques as they will have access to her signature and account details . . they could set up a Direct Debit and take out money

You indicate that it's not 6yrs since the last payment/acknowledgement, if that's true the debt is not stat barred yet

Your mum can send them a CCA request and see what Blackhorse actually have paper wise or as you say there's not much of a relationship between your mum/brother she could always send any info she has about him in the hope they'll start on him

Unfortunately (As you more than likely know) your mum will be held responcible unless they can get to your brother and get him to pay

Good luck

R

[cerberusalert]

JonCris Payment does NOT invalidate the limitation act The debt is now timed barred

Just to make things clear, if there has been a clear period of six years when no payment or written acknowledgement of the debt was made then it will be Statute Barred and no further payment need be made. However, you will need to ascertain what has occurred with this a/c and it would be advisable to send a SAR to the original lender to discover the payment history.

 

If there isn't a clear six years I'm afraid as guarantor you will be held liable.

 

Also it will provide a copy of the agreement which we will be able to check for enforceability.

Edited April 8, 2010 by cerberusalert

[JonCris]

Just to make things clear, if there has been a clear period of six years when no payment or written acknowledgement of the debt was made then it will be Statute Barred and no further payment need be made. However, you will need to ascertain what has occurred with this a/c and it would be advisable to send a SAR to the original lender to discover the payment history.

 

If there isn't a clear six years I'm afraid as guarantor you will be held liable.

 

Also it will provide a copy of the agreement which we will be able to check for enforceability.

 

Making a payment within 6 years DOES NOT invalidate the limitations act. however a CCJ does. Provided they are careful not to commit harassment they can continue to ask for payment but they CANNOT enforce the debt

 

To have an enforceable debt post 6 years they should have obtained a CCJ pre 6 years

 

A loan secured by deed such as a mortgage etc is enforceable for upto 12 years unless further secured by a CCJ

[cerberusalert]

I never said it invalidates the Limitations Act, on the contrary I said that if payment wasn't made for a clear period of six years it invokes the Act. However, if there isn't a clear period then it isn't Statute Barred.

[JonCris]

I never said it invalidates the Limitations Act, on the contrary I said that if payment wasn't made for a clear period of six years it invokes the Act. However, if there isn't a clear period then it isn't Statute Barred.

 

No your missing the point even if a payment is made within 6 years the 'unsecured' debt still becomes unenforceable after 6 years UNLESS secured by a CCJ. Like all claims the claimant should protectively issue proceedings & seek judgment to avoid being time barred within 6 years of the default

 

A 'secured' debt such as a mortgage is recoverable, without a CCJ, for upto 12 years

Edited April 8, 2010 by JonCris

[cerberusalert]

I haven't missed the point at all. e.g a debt may be 10 yrs old and for arguments sake say was paid for the first 2 years and then there was a gap of six years before another payment was made & say payments were continued for another couple of years & then stopped again even though payments had been made a second period the debt would be Statute Barred because of the six year gap. However if the gap had only been five years the clock would have been reset when payments were resumed. In that case it would not be Statute Barred.

[rapterman]

No your missing the point even if a payment is made within 6 years the 'unsecured' debt still becomes unenforceable after 6 years UNLESS secured by a CCJ. Like all claims the claimant should protectively issue proceedings & seek judgment to avoid being time barred within 6 years of the default

 

 

Excuse me for jumping in on the thread but this one has caught my attention.

 

JonCris, if I’m reading you correctly are saying that from the date of when a default notice has been issued then if the debt has not been paid within the six years it can become statute barred even if payments have been made in this six year period unless the creditor has obtained a CCJ?

[woody1066]

I will add my threppenny worth as far as I know it.

 

In order for a debt to become statute barred then 6 years have to have elapsed since any payment was made on the debt. If any payment was made within 6 years then the debt is NOT statute barred.

 

 

Have I got that right?

[cerberusalert]

Have I got that right?

Yes

[rapterman]

In order for a debt to become statute barred then 6 years have to have elapsed since any payment was made on the debt. If any payment was made within 6 years then the debt is NOT statute barred.

 

 

That’s what I thought before reading this thread.

 

 

Example:

Let say you take a loan out for £25,000 over five years, you keep up the correct payments for the first two years and for some reason stop paying. After say a few months the creditor issues you a default notice and sends the account to a DCA.

The DCA contacts you and you agree to pay a reduced monthly payment, this goes on for six years from when the default was issued and you then stop paying them again.

 

From what I understand that JonCris is saying is that the debt it now statute barred as the creditor failed to get a CCJ during the six years from when the loan was defaulted.

[cerberusalert]

From what I understand that JonCris is saying is that the debt it now statute barred as the creditor failed to get a CCJ during the six years from when the loan was defaulted.

JonCris and I are saying the same thing really, although I believe he has misread the OP and thinks that there is in fact a clear period of six years where no payment was made.

 

The OP has in fact stated

by the by, since then my stupid brother has been backwards and fowards with his payments, paying them, not paying them, back paying what he owed and he eventually stopped (not for 6 years tho!)

 

That is why I suggested sending a SAR to determine the payment history.

[JonCris]

Yes

 

 

No

[JonCris]

There is assumtion amongst most debtors that if you make a payment then the 6 years re-commences. It does not. Limitation can only be waved with your 'knowing' agreement & if your led to believe that the debt is enforceable ie NOT statute barred & you make a payment without the creditor telling you it's already 'out of time' then the debt is STILL statute barred

[JonCris]

AND they the creditor (although unlikely) could be charged with fraud under the 2006 Act

[cerberusalert]

We don't know whether there is a clear six year period where no payment was made in this case tho', you are assuming there is.

[woody1066]

We seem to have two views contradicting each other here. I think that it is very important that this is settled once and for all. so I repeat the question:

 

If (for example) I have a debt that is 5 years 11 months and 30 days old and I make a payment on it, for whatever reason, is it going to be staute barred in a days time or not?

[saintly_1]

My understanding is if there has been no payment or written acknowledgment of a debt for a clear 6yr period and no CCJ on the debt then said debt is statute barred. Any payment made restarts the clock on when the debt will become statute barred.

 

HTH

[k4t1e2]

wow thank you all so much for your responses! it is all very confusing, you guys get confused too!

 

Unfortunately my mum cannot confirm whether there has been a clear 6 year period without payment. My mum has said that my brother only had the moped for a few months before it was stolen and he did make the monthly payments. However, when the moped was stolen and the insurance refused to pay out for it, my brother also refused to pay. As far as my mum is aware he didnt make any more payments until about 3 years ago. (the insurance was invalidated as he hadnt owned the moped long enough, probably a different issue in itself!)

 

my mum said about 3 years ago they started chasing him again but she said even he cant remember whether he paid anything (brother a bit of a fibber, so cannot get to the truth).

 

since my brother refused they have harrassed my mum. she has agreed to pay them £10 per month by cheque (i will advise her to stop doing it that way, how should she pay if she does?). my brother is supposed to give my mum the mioney each month but doesnt (sweatty tenner!!) but because they harrassed her so much and threatened her she felt she had not other choice than to pay.

 

thank you again for help!!

 

can my mum request a sort of statement from then breaking down all payments made, charges and interest? even though it is in my brothers name? should she try the SB letter anyway? what is the letter known as to send to them to confirm they have the original paperwork?

 

(lastly, would they really copy her signature???) thats shocking!

[cerberusalert]

Your mother could send a CCA to the debt collector http://www.consumerforums.com/resources/templates-library/86-debt-collectors/581-cca-request-letter recorded delivery enclosing a £1 postal order, this should produce a copy of the original agreement, if they fail to provide it or it's unenforceable she can legally withold payments. They have 12 working days from receipt to provide it.

 

She could also send a SAR http://www.consumerforums.com/resources/templates-library/86-debt-collectors/576-subject-access-request-debt-a-dca to the original creditor. This should also produce a copy of the agreement, but more importantly a statement showing when and how many payments were made, from this we'll be able to determine whether it's Statute Barred or not.

 

Alternatively she could just send the Statute Barred letter http://www.consumerforums.com/resources/templates-library/86-debt-collectors/578-letter-to-dca-persistant-after-statute-barred the onus will then be on them to prove it isn't.

[JonCris]

We seem to have two views contradicting each other here. I think that it is very important that this is settled once and for all. so I repeat the question:

 

If (for example) I have a debt that is 5 years 11 months and 30 days old and I make a payment on it, for whatever reason, is it going to be staute barred in a days time or not?

 

NO

 

but if as result of their demands you make the payment AFTER 6 years then it's still time barred. The only exception would be if you knowingly agreed to waive limitation

 

The creditors claim that you have agreed that limitation no longer applies by making a payment is wrong your consent has to be informed

[Bazooka Boo]

:grin:

I must admit, that if I hadn't read the whole thread, then I would have jumped in ill informed, as the limitations act is something I am very familiar with, however, I do believe that you were both reading off the same song sheet, just that one was singing it slightly differently.

 

Once the debt has gone the distance of 6 years (5 in Scotland) with no payment or acknowledgement then it is Statute Barred, and any payments or acknowledgements made after this time WILL NOT re-start the clock.

 

ONLY if a payment is made within the limitation period (6 yrs/5 in Scotland) Or a written acknowledgement that the debt exists will that then restart the limitation period, so as woody asked making a payment after a period of 5yrs 11mths and 30 days WILL restart the limitation clock.

 

As for the OP and getting back to helping out, I was a guarantor for my sister years ago, she defaulted on a £500 loan, and as it was compound interest this ballooned to £2500, by the time I was approached by the loan 'shark'? to pay back the money.

 

The first thing I did was write to them with an offer of payment on the proviso that they stopped any further interest, which they did.

 

I doubt the loan was taken out with such a disreputable company that my sister went too, but this was in the early 90's, so I would think that all interest would have been stopped or capped at least.?

Edited April 9, 2010 by Bazooka Boo