Query re. Defaulted accounts & credit files

Hey all,

New member to the group so i apologise if this has been asked and answered before but I hope someone will be able to help...

I have an outstanding account with a major UK mobile phone company which defaulted back in March 2001.

In an effort to clear the balance I wrote them a letter asking them if they were willing to knock 25% off the balance in exchange for a single payment which would clear it.

They wrote back telling me that they had updated the records held by Experian & Equifax to reflect the updated balance (I had been making monthly payments of £10), which was fine as I had requested this also.

However, instead of making any kind of reference to my request of reducing the debt in order for a one off payment to clear it once and for all, they felt the need to inform me that 'as a customer I was duty bound to pay the monthly bills when they came in and because I didn't they had to mark my account as defaulted...'

I understand that after 6 years defaulted accounts are removed from credit agencies files.

My questions are: Whats happens after 1st March (exactly 6 years since the account was defaulted)?

If I stop making payments after this date can they chase me for the outstanding money?

Is the defaulted account simply removed never to return?

Any help would be appreciated!

CJ

Reply to
CJ
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Hey all,

New member to the group so i apologise if this has been asked and answered before but I hope someone will be able to help...

I have an outstanding account with a major UK mobile phone company which defaulted back in March 2001.

In an effort to clear the balance I wrote them a letter asking them if they were willing to knock 25% off the balance in exchange for a single payment which would clear it.

They wrote back telling me that they had updated the records held by Experian & Equifax to reflect the updated balance (I had been making monthly payments of £10), which was fine as I had requested this also.

However, instead of making any kind of reference to my request of reducing the debt in order for a one off payment to clear it once and for all, they felt the need to inform me that 'as a customer I was duty bound to pay the monthly bills when they came in and because I didn't they had to mark my account as defaulted...'

I understand that after 6 years defaulted accounts are removed from credit agencies files.

My questions are: Whats happens after 1st March (exactly 6 years since the account was defaulted)?

If I stop making payments after this date can they chase me for the outstanding money?

Is the defaulted account simply removed never to return?

Any help would be appreciated!

CJ

Reply to
CJ

You have admitted you owed the money so they can chase you for six years from the date you admitted you owed the money. I'm not so certain about the credit record but I would think a similar situation applies.

Reply to
Peter Saxton

Yes, for another six years. With each payment you make, you are acknowledging the debt exists. A debt only becomes unenforceable after it has remained unacknowledged for six years.

Reply to
Ronald Raygun

The only debt you are acknowledging is the one you have paid.

Reply to
Peter Saxton

What do you mean by that? It's my understanding that if you make a payment in part-settlement of a debt, you are acknowledging that the whole debt exists.

Reply to
Ronald Raygun

Who says it's in part-settlement of a debt?

If you think I owe you £300 and I think I owe you £100 and I pay you £100 why is that an acknowledgement that I owed you £300?

Reply to
Peter Saxton

The way the OP said "if I stop making payments" leaves little doubt that he is trying to pull a fast one.

It isn't, not by itself. But if there exists loan paperwork signed by you more than 6 years ago, then any payments you make to me (unless there is reason to suppose they relate to something else) confirm that you still believe that debt to be active until settled. If we should happen to disagree about whether you then still owe me a further £200, that can be resolved by independent arbitration or court.

Reply to
Ronald Raygun

Not after six years.

Reply to
Peter Saxton

Peter,

Read the orginal post, he offered to pay 75% of the debt, which means he acknowledged the debt and therefore it stands for another 6 years.

The phone company ignored his offer by reminding him it was his responsibility to pay his bills.

regards

nemo2

Reply to
me2

I know. Read my reply to the original post where I said that.

You seem to be confusing the sub-thread with the original post.

Reply to
Peter Saxton

Yes, even after six years of taking out the loan, but not after six years of last acknowledging that the debt exists. I understand that making any payment which is clearly related to the loan account is deemed to be such an acknowledgement and therefore restarts the six year clock. I gather in the case of secured loans such as mortgages the limit is 12 years rather than 6. Not a lot of people stop making mortgage payments after 12 years and mock their lenders saying catch me if you can, do they?

Reply to
Ronald Raygun

What do you mean by: "making any payment which is clearly related to the loan account is deemed to be such an acknowledgement"?

Obviously making a payment and acknowledging the remainder of the debt will start the six years again, but simplying making a payment doesn't acknowledge there is a further debt outstanding so the six years doesn't start again.

Reply to
Peter Saxton

I mean that making a payment into a loan account acknowledges that there has been a loan, so there can no longer be a dispute about that fact. At best, therefore, there can only remain a dispute about how much debt remains outstanding.

But it will be a matter of historical record and documentary evidence as to how much was originally borrowed, and what the interest regime was to be, and if proper bookkeeping practice was observed it will be easy to confirm how much is in fact outstanding.

The bottom line is that to "get out of" repaying a loan by exploiting the 6-year rule, you must avoid doing anything during those 6 years which can be construed as acknowledging it, and to be safe you must indeed therefore make no payments at all during that time.

Reply to
Ronald Raygun

I still don't think that paying you £100 by itself acknowledges that I owe you another £200.

Reply to
Peter Saxton

It doesn't. It acknowledges that you did originally owe me a sum of which the £100 is part. It (by itself) says nothing about how much the debt originally was or how much still remains outstanding.

Those blanks will be filled in by other evidence.

It is a qualitative, not quantitative, acknowledgement. The effect is simply to make collection of the remainder (however much it might be) enforcible.

Reply to
Ronald Raygun

If there's no other evidence to indicate that an acknowledgement of a debt has been made in the last six years then it's not enforceable.

Obviously, if there has been acknowledgement ofa £300 debt then it is enforceable for six years from the date of acknowledgement.

Reply to
Peter Saxton

I believe that statement is only correct if you delete the word "other". Any payment is of itself an acknowledgement, not evidence of it. Of course evidence of a payment would be evidence of acknowledgement. :-)

I don't think that's how it works. The size of the debt is immaterial. A payment towards it acknowledges it, and makes collection of the balance (however much it might be) enforcible for the *next* 6 years.

Reply to
Ronald Raygun

So if I think I owe you £100 and you think I owe you £300 I should not pay anything and hope that the six years passes?

Reply to
Peter Saxton

That's about the size of it. But so long as I get my Small Claim in within the 6 year limit, you can kiss that smug grin of yours goodbye.

Besides, I have Mafia contacts. Knee experts. Now who's grinning smugly?

Reply to
Ronald Raygun

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