If you have a very old debt you may be wondering whether it ever becomes too old to be chased/recovered. The answer is that (in the UK) unfortunately a debt can exist indefinitely and the creditor has the right to contact you about it (although you as ever are under no obligation to speak to them about it). The status of the debt and the measures that can be taken to chase it do change after a period of time.
Old Debt – What Happens to it
If a debt goes for a period of 6 years without any attempt at contact between the debtor and the creditor it becomes “statute barred”. This means that although the debt still exists the creditor cannot take any legal action relating to it. So you cannot be given a County Court Judgement or be made bankrupt over a statute barred debt. The fact that no action can be taken often means that creditors in this situation will accept a nominal sum to settle the debt.
If you have a very old debt that has not been chased for a long time what you must not do is try and contact the creditor in any way – this will re-start the 6-year period. Also note that the 6 years rule doesn’t apply if the creditor has been making reasonable efforts to contact you if for instance you have moved.
Tags: Debt Advice, old debt, statute barred
If you’re saying to yourself “I’m in debt” and worrying about it or wondering what you can do about it then you need help and you need to take action now! Debt is like a lot of life issues – they don’t get any better if you just ignore them. Tackle the problem head-on now and you will be gald you did in a few years time.
I’m In Debt – What Should I Do?
The first thing you need to do is work out how much debt you have. Gather together all of your credit agreements and credit card statements and write down a list (or put it in Excel) of all your outstanding debts, with the current balance (if you know it) and the monthly repayments.
Next get your bank statements and write down a full budget of all of your regular monthly expenses (this is the easier part) and try and identify as much of your other spending as you can (food, entertainment, clothes, gadgets etc).
From the bank statement or recent pay advice get your total income from all sources (including benefits/second jobs etc.)
What Next?
Take a look at your budget and compare your total outgoings with your income – is there money left over that you could use to pay off your debts or is there a deficit that is being funded by increasing debt? Start thinking about how you could reduce your expenses.
That’s it for now. In a future post I will explain more about changing your budget and spending habits and what solutions you should be considering for your debt problem.
Tags: Debt Advice, Debt Problems, Debt Solutions
Debt complaints (people complaining about the way their debt is being managed/chased/increased) are on the increase. With ever more people falling behind with their payments this is inevitable. What can you do if you have a complaint related to your debt.
Debt Complaints – What You Should Do
If you have any concerns about debt charges/penalties then the first thing you should look at is your original credit agreement. This will cover such issues as what fees or penalties can be applied to your account in different situations, e.g. if a payment is missed.
If you feel that you are suffering from persistent and abusive phone calls from debt collection agencies then you should immediately write to the collection agency concerned requesting them to stop and informing then that if they don’t you will be taking your complaint to the relevant authorities. This will sometimes work, but if not seek the help of a debt charity (like the Citizens Advice Bureau in the UK) that will advise you of your rights. Please also remember that you do not have to speak to debt collectors – simply put the phone down on them!
Tags: Debt Advice, debt complaints
