Overdrafts -Stat Barred?

[vengeancedemon]

Quick question

I understand about loans and Ccards being SB after 6 years of no payments/not acknowlgment etc, but does the same criteria apply to overdrafts?

 

Many thanks

[harrassed senior]

It is a debt, so am sure this would be subject to normal SB legislation, not 100% sure, interesting question.

[Halibutt]

Just my opinion, but I wouldn't think that SB applies in the case of an overdraft. Although it's a loan of a kind and as such, attracts interest and charges, it's a different kind of contract isn't it? I mean, in the same way that a CCA request can't be made for an overdraft... I would think that the banks would have covered themselves on this matter - afterall, they've had plenty of practice fleecing people unfairly.

 

As HS said, an interesting question and it would be good to have a definitive reply!

[twofoot]

An overdraft is very unlikely to be an overdraft after 6 years. A bank would nearly always call it in and terminate your agreement in a year or less, certainly not much longer. Once they have terminated your agreed overdraft it is no longer an overdraft. It then becomes subject to the limitations act like any other debt. That's the way I see it anyway. Maybe someone knows better.

[maroondevo52]

Quick question

I understand about loans and Ccards being SB after 6 years of no payments/not acknowlgment etc, but does the same criteria apply to overdrafts?

 

Many thanks

 

Yes, don't see why it should'nt.

[Tingy]

Have a look at your credit report (get it free online) and see if the account(s) is/are marked as defaulted. Once in default it is a debt and after 6 years becomes statute barred as long as there has been no contact. Banks can be very slow in registering defaults, but I'd be surprised if they've let it go 6 years without doing anything. Have you not had any letters from DCA's etc.... re these debts?

[Lemmein]

Im sure I read not so long ago on another forum a post by a legal practitioner of some sort stating fairly clearly and confidently that overdrafts are bound to the statute of limitations just like any other consumer debt.

 

In the 'eyes' of the limitation act its irrelevant whether the money is owed as a result of a credit agreement (CCA) , loan, or an overdraft. And I also recall the poster saying that the limitation period commences the day the creditor/bank sends a request for repayment having exceeded the agreed overdraft amount.

 

i hope somebody can confirm this is correct information?

[silverfox1961]

According to my little black book, there are only 3 categories that have a SB limit of 12 years and overdrafts aren't one of them. Everything else is 6 years or under.

 

It does say, "Recovery of a sum due under statute-6 years"

[rnp1966]

So assuming the 6 year sb rule applies, would this be from the date of last payment or from when the bank decided to default with the cra? The reason for the question is i had a joint bank account, i had the basic hole in the wall card and my ex had the multifunction cheque card, when we split she had a spend up before leaving the country and me with the bank to deal with any way there is nearly 18 months discrepency between date of last payment and default notice.

[maroondevo52]

Date of last payment.

[UnitedFront]

Limitation Act 1980

5. Time limit for actions founded on simple contract.

An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.

 

A simple contract is any contract not contained within a deed. When you take out an overdraft, you enter into a simple contract - albeit a regulated contract. On that basis, there can be no argument, in my opinion, against the fact that an overdraft is statute barred pursuant to S5 Limitation Act 1980 after 6 years.

 

Cheers.

UF

[Tingy]

The Office of Fair Trading (OFT) has issued Debt Collection guidance which looks at whether a debt is being collected fairly. They say:

• It is unfair to pursue the debt if you have heard nothing from the creditor for 6 years.
  

This is quoted direct from the insolvency hepline site so will be correct. So basically the clock starts ticking when you last made contact with them in form of payment, phone call, letter etc.... If they "hear from you" the clock starts all over again.

[UnitedFront]

The Office of Fair Trading (OFT) has issued Debt Collection guidance which looks at whether a debt is being collected fairly. They say:

• It is unfair to pursue the debt if you have heard nothing from the creditor for 6 years.
  

This is quoted direct from the insolvency hepline site so will be correct. So basically the clock starts ticking when you last made contact with them in form of payment, phone call, letter etc.... If they "hear from you" the clock starts all over again.

 

Not entirely true, strictly speaking. Firstly, simply hearing from a debtor, for example in a telephone call, is not enough to restart the clock. To restart the clock, an acknowledgement of the debt has to be made. This acknowledgement must be in writing and should be signed by the debtor if it is to effectively restart the "clock".

 

Limitation Act 1980

30.— Formal provisions as to acknowledgments and part payments.

(1) To be effective for the purposes of section 29 of this Act, an acknowledgment must be in writing and signed by the person making it.

 

A simple letter, unless upon construction it can be said that the letter actually acknowledges the debt, cannot restart the clock.

 

Also, whilst the 6 year time limit may be accurate for the majority of cases seen on these forums, it is not fair or true to say this is always the rule. As has been noted previously in this thread, there are some instances where the limit will be set at 12 years - for example money being claimed as owing under a mortgage.

 

Cheers

UF

[vengeancedemon]

Thank you all for your helpful observations, particularly that of any vcommunication, I have always understood that irrespective of the source of the account, an actual aknowledgement of an account or debt will "start the clock" but a question/letter of dispute/letter for evidence etc does NOT start the clock per se

[UnitedFront]

Exactly right. Despite what creditors and DCA's might try and make you believe, a telephone call or letter of dispute/denial are not capable of restarting the clock. S30 is very clear about what can constitute an acknowledgement for the purposes of setting a new starting date for limitation.

[MONX]

Apparently (according to some lovely DCA's) I had a Lloyds TSB account with an overdraft, a personal loan and various late charges etc added to the outstanding sum. Ist Crudit and Con-nowt sent me a SD after six years of no contact and I sucessfully got it set aside. I was unaware at the time that the alleged debt was statute barred and it was due to the SD that I SAR'd the OC and discovered that it was SB'd. Originally I had the SD set aside because the alleged debt was in dispute and Ist Crudit and side kick Con-nowt had not supplied any paperwork. It was during the SD set aside hearing that I introduced the fact that the alleged debt was SB and the Judge agreed, not only was it SB but that they were very naughty lumping the OD and the loan together as they were different but still both covered under the statute of limitations act at six years.

[jimbo45]

Limitation Act 1980

5. Time limit for actions founded on simple contract.

An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.

 

 

A simple contract is any contract not contained within a deed. When you take out an overdraft, you enter into a simple contract - albeit a regulated contract. On that basis, there can be no argument, in my opinion, against the fact that an overdraft is statute barred pursuant to S5 Limitation Act 1980 after 6 years.

 

Cheers.

UF

 

Hi there

I assume therefore that a Mortgage does not fall under this -- but does the 12 year rule apply?

 

This is only of "Theoretical interest" since I doubt if a Mortgage company would wait 3 weeks never mind 12 years before investigating "delinquent accounts".

 

Just a final Q -- if a property is re-possessed and there is a shortfall -- how long can they chase you up after they have sold the property.

 

(My view would be to say STUFF THEM since if you don't have any more assets what could a Court do -- also Bailiff's would be pointless since nothing to sieze so I doubt that they would bother with a Court).

 

Cheers

jimbo