settlements

[CHolic]

We got into debt years ago when the country had a building recession in 1995. Our house reposessed and my husband building company went bust. When we moved I took all our debts with us and we came to an agreement with the bank for the negative equity and it was satisfied. I was in talks with my then bank to settle the overdraft. The company decided that the debt be written off as I had no means of paying. Now in 2006 a debt collection agency have contacted me for the outstanding debt. I cannot find the paperwork on this as it is so long ago. What can I do?

[Oneeyedvic]

Ask them to prove the debt, and ask for all copies of letters sent in the last 6 years.

If a company hasn't chased a debt in 6 years, they will find it almost imposssible to take any further action.

If any problems, please post back. Do not ask for anything else or enter into any other correspondence with them.

[themas]

You say the negative equity on the house was satisfied. If that was the case then the debt now being chased is related to the overdraft. If you have definitely had no contact with the lender about this for the last 6 years then it is statute barred under the Limitation Act. This means the lender cannot take Court action to recover the debt, but the debt still exists - unless you can prove an agreement to write it off - and your credit record could still be affected.

Assuming you have not had any contact, I don't go along with Vic's advice on this. I think all you need to do is write (keep a copy) to say there was an agreement to write off the debt in 1995 (or whenever) and to deny any liability on the grounds that the debt is statute barred. It is then for them to come back to you with evidence that it is not statute barred if they have any.

[Oneeyedvic]

The reason I would ask for correspondance is as if they have tried to contact you at a previous address, then (imho) the Limitation will not apply.

[themas]

Vic - I think you will find that for the Limitation Act not to apply the debt has to have been acknowledged by the debtor within the last 6 years. This is not just a case of the creditor writing letters. If the debtor hasn't received them, or has received them and ignored them, then acknowledgement has not occurred.