Statute Barred Debts?

[Jellycat]

Hi

 

I have been contacted by a debt recovery agency, via hand-delivered letter, telling me I have 7 days to respond to a demand from the Glasgow Housing Association to pay a £9,000+ alleged debt from 2005, for money owed on upgrading works that were at that time pending on a flat I owned with an ex-partner. At the time the debt is supposed to have arisen we were in the process of selling the flat and the purchaser was made aware of the pending works and agreed to take on the responsibility for paying for them (the asking price was reduced to reflect this). The works were then later carried out, well after the flat was sold.

 

Having spoken to the GHA, they seem to think me and my ex are still liable for the debt, which seems to indicate some kind of miscommunication during the conveyancing of the flat that I'm trying to get to the bottom of. I insisted to the GHA that the mistake was there's and I did not owe them a penny but I'm now very concerned that I may be liable for this debt through no fault of my own due to a legal error.

 

My understanding is that this supposed debt could be statute barred in any case as it's over five years old, but is there an exception to this rule if the disputed sum relates to property improvements or if I have changed addresses over the years? I've changed addresses a few times since the sale of the flat was concluded in 2005, but have always had postal redirections for 3-6 months in place and have never heard anything about this until last week. Furthermore, I'm mystified as to why this has come up now - the GHA person suggested that it could have taken this amount of time for the recovery agency to find me, but I still live in Glasgow and am on the voters role etc.

 

Any thoughts or advice would be much appreciated.

 

Thanks!

[National Debtline]

Hello there.

 

As far as we're aware there are not any special rules relating to home improvements. Moving wouldn't affect the limitation period. The five years would run from when they first sent you the demand for payment.

 

Hope this helps.

[Jellycat]

Thank you very much for the reply. Should I reply to the recovery agency to point this out? My solicitor has advised me not to get in touch but I don't particularly want to let this run on to the point where I get notice from a court that the GHA have raised an action against me. If they did, would a summons or notice from a court go on my records, including my credit record?

[ukaviator]

Any sign of a CCJ against you for the debt?. Sometimes a CCJ is issued for a debt then lies dormant for sometime. To check to see if there is an outstanding CCJ have a check here:

 

http://www.trustonline.org.uk/understand-judgments-fines/register-and-ccj-checks/

[Jellycat]

Hi

I think this would fall under an ordinary clause notice from the Sheriff Court but nothing has been registered as far as I can tell. The only communication I've had is a 'Notice of Court Action - GHA Management Ltd' from the debt recovery agency. This says that the GHA intend to 'instigate court action against you in respect of the outstanding debt' - 'Unless immediate payment of this debt is made, GHA intend to raise a court action for recovery of this debt. They also seek decree for interest and the expenses of raising this action. Payment of this account should be made within 7 days direct to the GHA'.

 

The debt amount is listed on the notice, but no date is given for the debt or any details of what it is for - it only says 'capital'. The letter was hand delivered. I'd be very surprised to find that the GHA, a housing association, are actually legally allowed to act in this way. Surely they have rules to govern their behaviour?

[Crocdoc]

Have you mentioned the Staute Barred aspect of this to your solicitor, no offence intended but solicitors are not always fully conversant with debt issues.

[Jellycat]

Hi,

It was actually the solicitor who mentioned the term to me - I didn't know about it before. My main worry is that, because it's property related, the alleged debt is not statute barred and I don't know how knowledgeable my solicitor is. He advised me not to respond further to the notice - but I'm wondering if I should, at least to deny the debt? As I was saying, I don't want this getting to the stage of the GHA raising a court action. I'd rather they understood that they have made a mistake before I have to contest their claim.

[Crocdoc]

I wiil come back to you shortly once I have read the exceptions to the SB rule in Scotland.

[Jellycat]

Much appreciated - Thanks!

[Crocdoc]

My view is that this debt is most certainly Statute Barred

The exceptions are as follows.

Time limits in Scotland

34 In Scotland, there is a time limit of five years or 20 years for taking legal action to claim money owed. The time limit depends on the type of debt owed. Some of the rules are complicated, for example, if there are arrears of payments of mortgage interest the lender has five years to take action, but where there are arrears of payments on the principal sum (capital) owed under a mortgage, the time limit is 20 years. The rules for time limits for pursuing some debts relating to payments administered by a UK government agency cut across the five or 20 year rules in Scotland. The main examples are:-

• overpayments of social security benefits can be recovered through the courts within six years of the date that the decision maker decided the overpayment was recoverable
  
• overpayment of housing benefit and council tax benefit, administered by a Scottish local authority, can be recovered within five years of the date that the decision maker decided the overpayment was recoverable
  
• arrears of community charge and/or council tax are recoverable under the 20 year time limit
  
• there are no time limits on HM Revenue and Customs collecting unpaid tax, once the initial assessment has been made.
  

If you choose to go down this route I have modified the SB letter, which reads as follows

Dear Sir/Madam

(Your Ref )

I refer to your correspondence dated xxxx requesting the sum of xxxxx

In response I would ask you to consider the following points:

1) This alleged debt has now prescribed under the Prescription and Limitation (Scotland) Act 1973 as the debt has subsisted for a continuous period of five years-

(a) Without any relevant claim having been made in relation to the obligation,

A relevant claim would normally be the raising of a court action-

And

(b) Without subsistence of the obligation having being relevantly acknowledged,

Then as from the expiration of that period the obligation shall be extinguished

A relevant acknowledgement would normally be an unequivocal written admission by the debtor that the debt still exists or by making payments to the debt

We would further advise you that in Scotland unlike England and Wales the debt is totally extinguished and ceases to exist.

Unless you have contrary and irrefutable proof to the above we would ask that you refrain from making any further claims.

Yours faithfully

[Jellycat]

So, really the only property or 'land' related exceptions would apply to mortgage payments and not building improvements?

 

Should I definitely write to the GHA now or wait to see if I hear anything further?

 

This is extremely helpful - thank you so much. Can I ask where your information is quoted from?

[Crocdoc]

I contacted a friend in CAB who quoted it from their information system and forwarded by e-mail.

It is accurate

 

If I was in your position I would send them the letter as I understand that there is a great deal of SB debt kicking around collection agents at present.

 

Out of interest who is the collector?

Edited April 25, 2012 by Crocdoc

[Jellycat]

Excellent. Thanks very much for your help.

[Crocdoc]

Your welcome

[Jellycat]

Sorry - I didn't see your question about the collector. It's George Walker Recoveries, Royal Exchange Square, Glasgow. Would it be them or the GHA (or both) that I write to?

[Crocdoc]

I would suggest both by Recorded Delivery.

[Jellycat]

Will do. Thanks again for the advice.

[ukaviator]

Statute Barred Debt refers to any debt which has become time barred by operation of the statutory time limits referred to below. Once the relevant time period has elapsed, no Court proceedings can generally be raised to recover the debt. It is important to be aware of the jurisdictional differences which exist in the UK. In England and Wales, under the Limitation Act 1980, the limitation period for debts is generally, subject to a few exceptions, six years. The exceptions relate to a particular group of loans without a fixed or determinable duration or where the loan document is signed as a deed in light of the fact that the limitation period for deeds is 12 years.

 

In Northern Ireland, the position is governed by the Limitation (Northern Ireland) Order 1989 and again there is generally a six year time limit, again subject to exceptions which are similar to those which apply in England and Wales. In Scotland, this is governed by the Prescription and Limitation (Scotland) Act 1973 and the relevant period is generally five years. There are exceptions which apply to the Scottish provisions such that where either the creditor has made a relevant claim within the five year time period or the debtor has accepted the debt within the same period, the debt will not become statute barred. Apart from the different time periods which apply, there is also an important distinction to be made in terms of what happens to the debt after it has become statute barred.

 

In England, Wales and Northern Ireland debt which has become barred in terms of statute, still exists and is therefore still recoverable. It is therefore perfectly competent and compliant to take steps to try and effect recovery, so long as those steps, obviously, fall short of raising Court proceedings. It is also important that some contact has been made with the debtor prior to the end of the limitation period. The OFT will regard as unfair any attempt to recover a debt where there has been no such contact. Creditors also cannot mislead a debtor by threatening to raise Court proceedings when they know that would not be competent. If a switched on debtor advises that he will not make payment as he knows the debt has become statute barred, it will be regarded as unfair to continue to pursue him.

 

In Scotland, once a debt becomes statute barred, it is generally extinguished and therefore no longer recoverable provided that the creditor has not made a relevant claim within the five year period and that the debt has not been acknowledged by or on behalf of the debtor. In Scotland, after a debt has become statute barred, generally no further attempts to make recovery can legally take place. The debt no longer exists as a legal right and is deemed to have been abandoned or satisfied. The creditor should therefore not be making any attempt to contact the debtor. To do so, in ignorance of the Scottish legal position, would be unlikely to amount to any form of defence or answer in the event the matter came to the attention of the OFT. Hope this helps.

[Jellycat]

Hi

 

Thanks for the advice. So, I would be correct in assuming that any alleged debt relating to home or building improvement would be statute barred?