Another SB Question

[tastyjane]

Just pondering; is your Statute Barred date 6 years plus 1 month from last payment or 6 years from default date? I think I know its last payment and add a month to be safe.

Thanks

Jane x

[Undercover Elsa]

Re: Another SB Question

Morning Jane

As a general rule of thumb it's from the day after your first missed contractual payment.
If you later make payments after default then it's from the day after the last payment.

[gravytrain]

Re: Another SB Question

Hi

This is only true if the account has been defaulted and terminated, otherwise the SB date would be six years from the termination of the contract, that is 14 days after the issuance of the default notice.

There after it is reset by any payments or written acknowledgement.

BMW vs Hart cleared up any argument regarding this.

[Never-In-Doubt]

Re: Another SB Question

Hi

This is only true if the account has been defaulted and terminated, otherwise the SB date would be six years from the termination of the contract, that is 14 days after the issuance of the default notice.

There after it is reset by any payments or written acknowledgement.

BMW vs Hart cleared up any argument regarding this.

well, as you know - I don't believe it did (we had this discussion before) - that case was specific to HP agreements and not running credit remember. However it does boil down to the 'Cause of Action' - as detailed:

In BMW Financial Services (GB) Ltd v Hart 92012, it took the Court of Appeal to determine when the clock started to run. Under the HP agreement entered into between the parties, Hart was obliged to make monthly instalments and a final balloon payment at the end of the agreement. BMW could only claim monies from Hart when a notice of termination had been served on him or when BMW had communicated acceptance of his repudiation of the agreement.

Hart failed to pay two instalments and on 26 August 1999, BMW sent him a letter accepting his repudiation of the agreement and giving notice of its termination. In accordance with the terms of the agreement, that letter was deemed served on 28 August 1999.

Nothing further occurred until BMW issued its claim on 26 August 2005. Default judgment was obtained against Hart who had moved abroad. Hart became aware of the judgment when he returned to the UK in 2011 and applied to have it set aside on the basis the claim had been issued outside the six-year limitation period.

At first instance, the court agreed with Hart. It held that the limitation period started to run from when Hart first missed an instalment payment which was July 1999.

BMW successfully appealed. The Court of Appeal held that, looking at the wording of this particular contract, BMW could only make a claim once a termination notice had been given, or it had communicated its acceptance of Hart's repudiatory breach. It was only at that stage the sum under the agreement became due. Prior to that time, all that was due from Hart was the outstanding instalments. Limitation started to run when the notice was served on Hart on 28 August 1999 and the claim form had therefore been issued (just) within the limitation period.


The failure to pay an instalment did not of itself accelerate the obligation to pay the whole amount outstanding.

Note the red bold highlight within? That explains it was specific to that contract (not all and certainly not CCA s.78).

Anyways.......

We still go by 6 years + 1 month after first missed payment, most creditors/dca's accept that

[gravytrain]

Re: Another SB Question

Yes i remember.

The pertinent phrase is "could only make a claim when the agreement is terminated"

The conclusion was and is that the creditor cannot reclaim all sums under any agreement whilst it is still live, it makes no difference what kind of agreement.

The cause of action can only be post termination, sorry I thought that everyone understood this now.

If this were not the case the cause of action on an open ended agreement would keep stopping and starting every time a payment was made which would be wrong.

[Never-In-Doubt]

Re: Another SB Question

Yes i remember.

The pertinent phrase is "could only make a claim when the agreement is terminated"

The conclusion was and is that the creditor cannot reclaim all sums under any agreement whilst it is still live, it makes no difference what kind of agreement.

The cause of action can only be post termination, sorry I thought that everyone understood this now.

If this were not the case the cause of action on an open ended agreement would keep stopping and starting every time a payment was made which would be wrong.

Mate the pertinent phrase is actually "looking at the wording of this particular contract" - that's it. Simples

On regular credit agreements such as credit cards, the account is defaulted and terminated reasonably quickly after non payment so even if we work to that dateline, it would only affect SB by upto maybe 6 months - however we still report to the DCA that it is SB after 6 years from first missed payment and never yet had one come back and take remedial action based on this argument (BMW v Hart).....

I guess it's open to interpretation so we play it as we do and hope it works - even in confirmed SB cases of some years you get hassle, so a few months extra wait isn't an issue and anyway, we're good at blagging DCA's here

[gravytrain]

Re: Another SB Question

Mate the pertinent phrase is actually "looking at the wording of this particular contract" - that's it. Simples

On regular credit agreements such as credit cards, the account is defaulted and terminated reasonably quickly after non payment so even if we work to that dateline, it would only affect SB by upto maybe 6 months - however we still report to the DCA that it is SB after 6 years from first missed payment and never yet had one come back and take remedial action based on this argument (BMW v Hart).....

I guess it's open to interpretation so we play it as we do and hope it works - even in confirmed SB cases of some years you get hassle, so a few months extra wait isn't an issue and anyway, we're good at blagging DCA's here

I think it is important if people are going to claim statute bar to get the dates right there is a very similar thing happening at the moment OTR, the debtor has claimed SB and the creditor has come back saying that he SB date had not commenced because the agreement was still repayable under its terms.

Quite right that is the important point, that under that particular contract the agreement was only terminated when, just as in a CCA agreement it is only terminated after the issuance of a DN, I think the commentary mentions this somewhere.

I think that Rizzzle and Paul understands this, perhaps you could ask them for further clarification.

[Never-In-Doubt]

Re: Another SB Question

I think that Rizzzle and Paul understands this, perhaps you could ask them for further clarification.

Wanna slap



I know what you're saying but you are relying on a case that was quite specific to HP Agreements and NOT running agreements which actually changes the goalposts dramatically. That said I am not going to sit and argue this again, when we did it the other month, without any evidence to the contrary or in agreement - there is none. None, anywhere. Hence our stance stands - SB on a typical credit agreement would be 6 years from the date of your first missed payment.

Until someone loses that argument in court we will continue to work to it.

[SaltnVinegar]

Re: Another SB Question

I think it is important if people are going to claim statute bar to get the dates right there is a very similar thing happening at the moment OTR, the debtor has claimed SB and the creditor has come back saying that he SB date had not commenced because the agreement was still repayable under its terms.

Yes but they will say that, just the same as they will make the claim of a 'phantom payment' being made approx 2 years prior when you know for a fact that it hasn't. If they've bought a lemon they will try to blag either an admission of the debt, or a payment, whether its SB or not.

If you're playing the 'odds' game then the majority of DCA's are not going to commence a potentially expensive legal action on the basis of whether SB should have started 1 month after last contractual payment or whether it be termination of the agreement. Thats not to say that some won't - but its highly unlikely.

As with everything - devil is in the detail but personally I think the standard process is fine if you're arguing a case of SB as its easy enough to tie most DCA's in knots for the 2-3 months you may or may not be arguing the point around anyway.

[garlok]

Re: Another SB Question

The compounding problem SnV is the termination itself. We have for a number of years now argued the termination being ineffective on the back of a defective DN and I do not want to open that can of worms again. If I remember Paul's argument on this correctly, a defective DN means that they cannot terminate lawfully but that the defective DN can be remedied. Hence if we accept that the termination be the marker then it may be that Statute barring of a given debt may never technically start.

I have always accepted Nid's argument of the one month after the last payment being made as the marker plus a bit. So for us it will really be 15th October 2015 not 15th September 2015. If we were to take the termination, none of which are effective because of defective DNs then we have not even started the clock yet.

get my drift?

regards
G

[tastyjane]

Re: Another SB Question

Thanks everyone; on the last payment plus one month rule that makes me 14 months to go to SB on the last 4 of my cards - some of my defaults took over 6 months to register, just updating my spread sheet as we need to remortgage in 2021 should give me time to rebuild my credit record.


Jane x

[SaltnVinegar]

Re: Another SB Question

The compounding problem SnV is the termination itself. We have for a number of years now argued the termination being ineffective on the back of a defective DN and I do not want to open that can of worms again. If I remember Paul's argument on this correctly, a defective DN means that they cannot terminate lawfully but that the defective DN can be remedied. Hence if we accept that the termination be the marker then it may be that Statute barring of a given debt may never technically start.

I have always accepted Nid's argument of the one month after the last payment being made as the marker plus a bit. So for us it will really be 15th October 2015 not 15th September 2015. If we were to take the termination, none of which are effective because of defective DNs then we have not even started the clock yet.

get my drift?

regards
G

I do get your drift mate totally

These are technical arguments, which, if you are this far down the road with a DCA, the chances are you are close to a court action anyway

My view is that if you're playing the odds game (which most of us are with UE) then the chances are that most DCA's would not pursue a debt to court so close to SB whether the clock has been started on a technicality or not. I understand it could be an important technicality, but not one, to date, that has been brought to court that affects the majority of running credit agreements.

SnV

[garlok]

Re: Another SB Question

Absolutely SnV.

regards
G