Do you have to keep making payments to old debts?
It can be easy to get stuck in a long-term Debt Management Plan (DMP) or payment arrangements. If you are paying little each month, your debts will take a very long while to be gone.
This article looks at the questions people often ask about old debts where they have been making monthly payments to the debts.
If you haven’t been making payments, read No calls or letters about a debt for years as that is a very different situation.
Must I pay a debt that has dropped off my credit file?
A debt drops off your credit file six years after the default date. Most debts in a low payment DMP will have been defaulted (if one of yours hasn’t, read What should the default date for a debt be? because you may be able to get this changed) so after six years these literally disappear and your credit score improves.
But these debts still exist.
Even though they are old, they will never become “statute barred” (that is the legal term for a debt that is too old for a creditor to enforce) because you are making payments to them.. See When is a debt statute barred? for more details about this.
So if you don’t want hassle from the debt collector that owns the debt and possibly CCJs, bailiffs etc, then the answer is Yes, you do need to keep paying the debt – or settle it in some way.
If the debt is old, the paperwork may be missing
There is another possibility for some old debts that is worth exploring.
If the debt is a consumer credit debt – that is all types of loans, credit cards and catalogues but not including overdrafts – then the debt collector may not be able to produce correct Consumer Credit Act documentation. If they can’t, then they can’t take you to court for a CCJ and you can simply stop paying…
This is a very good chance this will happen for debts that were started before 2007. And it’s worth trying for more recent debts that have been in a payment arrangement or debt management for many years and have been sold to a debt collector.
This National Debtline factsheet explains how to ask the debt collector to send you the CCA agreement. And National Debtline are good people to talk to if you are sent something and you aren’t sure if it is correct or complete.
Am I really likely to get a CCJ for an old debt?
If you stop paying the debt, then it is much more likely the debt collector will go for a CCJ. Think of your creditor as snoozing quietly whilst your small monthly payments roll in – as soon as they stop, he is likely to wake up and rethink what to do!
Recently the number of CCJs has increased a lot – up to 320,000 in January-March 2019. Half of these CCJs were for less than £650, so don’t think your debt is too small for a debt collector to go to court!
If you carry on making the monthly payments, it is possible that you could get a CCJ. This may feel unfair – you have had a long-term arrangement with your creditor and you have kept your side of the agreement by making monthly payments – but legally the creditor can still get a CCJ.
But your debt is costing very little to administer, so the debt collector will often prefer to carry on getting small amounts of money from you each month to the hassle and expense of taking court action.
When a debt is sold to another debt collector, they may decide to look again at your situation – your credit file, your income and expenditure. In a DMP, your DMP firm will send them a new I&E every year, but in a payment arrangement, you may be asked to send one.
It’s best not to ignore a request from a debt collector for a new I&E. Although you don’t have to give them these details the new debt collector may decide you could be paying more and go for a CCJ if you won’t co-operate.
You are a bit more likely to get a CCJ if you have a house – a creditor can see from your credit file if you have a mortgage and may assume that equity has built up. The odds are that you won’t, but having a long term DMP with a house with a lot of equity can be a problem.
If I get a CCJ will the debt reappear on my credit file?
After a debt has dropped off it will never come back. But this isn’t good news because the CCJ itself will show on your credit file for six years, even if you settle it in full. (There is one an exception here – if you pay a CCJ in full within 30 days it will disappear.)
Is it a good idea to negotiate Full & Finals on these debts?
Definitely! Even if paying £5 a month to a debt doesn’t feel like much of a problem, it is always possible the debt collector will threaten court action and ask for more.
If a final settlement is agreed, the debt will not reappear on your credit file. A Guide to Full and Final Settlements has more information, including how to make an offer. If your debts have changed hands several times, the current creditor may have paid very little for the debt, possibly only pennies in the pound.
It’s not easy to say what you should offer – that will depend on:
- what you are paying – if the debt will be repaid in a couple more years the creditor may not be interested in a low offer;
- what you could afford to pay – it will help to get an offer accepted if you provide an Income& Expenditure sheet that shows you can’t afford to increase your monthly payments;
- if have a house with equity – this doesn’t mean a F&F will be refused, but it makes it less likely that a very low one will be agreed.
Where could you get the money for a F&F? If you already have PPI complaints underway, they could also help. But it’s now too late to start a new one. One idea that may work if you have had a lot of debts, especially high-cost debts, is making an affordability complaint.
Don’t borrow money to make a settlement offer. At the moment all the old debts will have interest frozen, don’t swap that for a new creditor charging interest.
Can you get a mortgage if you are in a DMP?
Information about charging orders
Ask for the CCA agreement for old debts
Steve says
I have a very old debt dating back to at least 2007 which was the last communication with the creditor. They haven;t been in contact with me since then and I’ve managed to build my credit score back up again and have a couple of credit cards and a loan which I have full control over and fully up to date with the repayments. After doing an eligibility check the creditor from 2007 is now saying I have a 95% chance of getting one of their cards for a balance transfer. If I go for this am I risking them bringing up the old debt and ‘resetting’ my statute barred debt with them?
Sara (Debt Camel) says
Once a debt is statute barred it is not possible for that to change and for it to become “unbarred”. Whether a debt is statute barred become more complicated earlier this year after a new court decision, see https://debtcamel.co.uk/statute-barred-debt/, but I would be VERY surprised if a creditor tried to argue this about such an old debt as yours.
Robert says
HI, I have an overdraft debt going back to 1997, I’ve been paying around £50 per month since then and never missed a payment for over 20 years now, I’ve not heard from them at all for probably at least ten years, I’ve moved five times (two of them abroad) in that period so they’ve probably lost track of me, the debt was around £60k and I’ll clearly never pay it of in my natural life, since then I’ve rebuilt my life and my credit but what do I do about this, I’m reluctant to make contact since after all this time and I would really struggle to settle it if I they wanted me too. I’m not sure what to do and it’s really worrying me now, any advice welcome, thanks
Sara (Debt Camel) says
You had an overdraft of £60,000 ?
Diane says
I am on a DMP with stepchange and I have never missed a payment in over 6yrs, I’m paying the minimum amount back to then, can you tell me do I still have to keep paying until all my debt until it’s cleared off , Estimated another 7yrs, or does it automatically clear after the 6yrs? Will my credit score be going up now as I’ve never ever missed a payment?
Sara (Debt Camel) says
The debts still legally exist and you can be taken to court for a CCJ even after they have disappeared from your credit record. If you stop paying, this is likely to happen so yes, you do need to keep on paying.
Your credit score is likely to get a LOT better if all your debts in the DMP were defaulted as they will be dropping off your credit record.
BUT read the section in the article above on If the debt is old, the paperwork may be missing as this may work for some of your debts, so your DMP will end sooner.
Jamie says
So if my debtor dosent have a CCA for me I can stop paying them ? Will there be any consequence?
Sara (Debt Camel) says
The creditor has to produce a true copy of your CCA, not the original one. If they can’t, then credit card, catalogue, HP or loan is unenforceable in court.
How does it currently show on your credit record? How old is the debt? What sort of debt was it? Has it been sold to a debt collector?
Martin says
Hi Sara – I have an old HP debt that goes back to 1997 (yes it’s 22 years old). I’ve been paying £4 let month as per a CCJ from 15 years ago. The debt as been resold 4 times and the current and previous debt owners know nothing about the CCJ. They have previously asked me to provide them with evidence of the CCJ which I’ve declined. But it occurs to me they may also be unable to provide a copy of the CCA. It’s only £4 per month and at this rate I’ll never actually pay the debt off. It’s it worth asking for a copy of the CCA or could I be poking a wasps nest?
Sara (Debt Camel) says
Are you saying the current creditor knows there was a CCJ but doesnt have the details?
what do you think the balance is?
Martin says
Hi Sara – sorry for delayed response. Newest owner of the debt knows nothing about the CCJ and keep asking me to complete a new income and expenditure form. The debt is just over £6k. I would love to get it written off if they can’t provide CCA.
Sara (Debt Camel) says
Well you can ask them for one… I suppose the danger is they may ask the previous debt collector and find out about the CCJ?
Andrew says
Hi Sara
Thanks for this article.
I’ve been on a StepChange DMP for some time now, just reaching 6 years from the date all of my accounts defaulted and the last couple drop off my credit file 31/12/19. At the current rate I am set for another 9 years of repaying. I have CCA’d all of the current debt holders. Some have confirmed and sent info to say enforceable. I have 3 particular accounts which are with IDEM (2 of them) and another Lowell. All 3 related to overdrafts with Halifax current accounts. 1 joint and 2 individual we are in a joint DMP.
I’m unsure if these overdraft debts are enforceable via CCJ. The reponse from both comapanies doesn’t really say is or isn’t, just says not coverered by CCA etc. I’d like to prioritise my payments to the other debts but obviously step change won’t differentiate and just say they all need to remain in the plan and paid.
If I were to stop using Stepchange and deal direct with each company as a way of not paying some, is there any chance of a CCJ on these 3 overdraft related debts?
Thanks
Andrew
Sara (Debt Camel) says
“Some have confirmed and sent info to say enforceable. “
so they have sent the CCA agreements?
Are there other non-overdraft debts where the CCA hasn’t been sent?
“I’m unsure if these overdraft debts are enforceable via CCJ.”
A CCA isn’t relevant for these. And yes the debt collectors could go for a CCJ for them.
Sara (Debt Camel) says
Also how much do the debts where a CCA has been produced add up to?
How much do the overdraft debts add up to?
And how much can you may to the combined debts each month?
Andrew says
Thanks Sara.
They sent CCA agreements for all apart from PRA on one Barclaycard debt for £4k who couldn’t produce.
The overdraft related amounts to £2750 across 3 accounts.
The CCA produced just over £18k combined.
We pay £220 a month currently. Paid off around 15k so far and 25k remaining.
Sara (Debt Camel) says
StepChange should drop the Barclaycard debt from the DMP if you send them the letter saying it is unenforceable.
There is no reason to prioritise the other debts over the overdrafts, they are all enforceable in court.
Unless you have money for a full & final, you should be looking at your other options such as a bankruptcy or an IVA. Are you buying or renting? Are you both working?
Andrew says
Ok thanks Sara I will request the CCA again on that account as it was around 1 year ago. If still the same I will send and ask SC to drop it but I think they will resist. This is the kind of response they gave when I asked them to remove the debt before, when PRA told us they had frozen it until CCA paperwork found.
“With regards to enforcement, PRA Group have decided not to take legal action. This means you can pay the debt off without incurring any further charges on the account.” Clearly they are working for the agencies interests and funded by the banks, such a stupid answer from them.
Hoping we can get some money ready to clear down in the next 3 years and walk away with a clean credit file and everything sorted. Only 1 person working and we rent. Worried about damaging credit file again if we needed to move or get a newer car (current is old) I think we could do that without having the DMP cancelled as they are essential items for us.
Sara (Debt Camel) says
No don’t start this cycle again! tell StepChange that PRA have still not found the paperwork and as the debt is unenforceable you want it removed from your DMP. If StepChange refuse, send StepChange a formal complaint.
Andrew says
OK I will do that and let you know if it moves to a complaint – thanks
Shantelle says
I was with Santander in 2006 and just been informed I owe 154.00 ,i dont remember owing this so have asked for proof from the bank,if i do get proof do i have to pay it
Sara (Debt Camel) says
who contacted you about this?
Paul says
Morning Sara,
I have a Credit card with HSBC that i haven’t made and payment to since March 2019, looking at my credit report the interest has been frozen on the account but it hasn’t yet registered as a default. If repaying is not an option what would you recommend to get this account default (to start the six year clock)
Thanks
Sara (Debt Camel) says
Is this your only debt problem? Might you be able to settle it in the next few years?
Paul says
Hi Sara
Yes it is and i will be able to settle in 12 months or so for sure. Just which option would be better in the long run? If i leave it as it is and then it gets defaulted in 6 months ive lost that 6 months if you understand?
Thanks
Sara (Debt Camel) says
You don’t want a default if it can be avoided when the debt can be settled that soon. I suggest you wait and settle the debt as soon as possible. If at any point they add a default date, you can ask for it to be backdated to September 2019, 6 months after ayou missed a payment.
Paul says
ok, thanks for your help Sara. I wish you well
Paul