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 could 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 a month 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
Ms G says
Hello Sarah,
I recently posted a question here about: I was contacted by a debt collection agency I have never dealt with before. It’s for a bank loan I have defaulted on in 2010. The bank passed on the debt to debt collectors and then it seems it has been passed on to this one. I have been making token payments to the first debt collectors ever since defaulting on the loan ( as advises at the time by CAB). I have sent a Credit Agreement request to the current debt collection company. They replied to me acknowledging my request followed by a second letter theat they are investing and it will tale weeks to carry out their investigation. We are now at working day 14 and haven’t provide proper proof of the credit agreement. I ‘d to know whether I can paying them. Can they still take me to court, can they still have an impact on my credit score? Should I wait and write a follow up letter to they haven’t provided me with proof and I will stop paying? The payments I make aren’t even with them.
Sara (Debt Camel) says
You can cancel the payments if you want, but as they are only £1 a month and you haven’t suggested thus is unaffordable, why not just wait a couple of months? It is really too early to assume the CCA cannot be produced.
This debt will not reappear on your credit record. And the current creditor should not start a court case. It’s up to you if you think it’s worth the hassle of cancelling the payment now or waiting until things are clearer
Ms. G says
Thank you for the advice. If I wait, should I send them another letter that I am stopping payments as they have not provided proof of the CCA?
Sara (Debt Camel) says
“If you wait” then surely you are not stopping payments?
Fiona says
Hi I have a debt held by Link Sourcing for a credit card debt from Barclaycard . The credit card was mis-sold and I received a payment.
As it was mis-sold where do I stand with the debt with Link Sourcing ?
Sara (Debt Camel) says
Are Link Sourcing collecting on behalf of Barclaycard or have they bought the debt?
How much payment did you get from Barclaycard for mis-selling, how long ago, and did this take into account the remaining balance?
Jayne Dickinson says
Hi, I was just wondering, if I continue to pay debt (an account that is in default) that is older than 6 years old, and it falls off my credit file because of this duration, will it continue to have a negative impact on my credit score?
Sara (Debt Camel) says
No. When a debt falls off your credit record it is no longer there at all so it can’t be included in your score.
What sort of debt is this? How long until it is repaid?
Jayne says
Thank you for the reply. It’s debt from along time ago when I was younger and silly that I never paid off, went into default and now I’m in payment plans with a few different companies. Ideally this will continue to be paid and paid off in full as soon as possible but now I’ve “grown up” and my spending had completely changed, I don’t want this to impact me long term.for example, getting a mortgage before the outstanding balances are cleared.
Sara (Debt Camel) says
ok, but do think about full & final settlement offers to clear the debts away sooner, see https://debtcamel.co.uk/debt-options/less-common/full-final/. This won’t cause the debt to reappear on your credit record.
Also read https://debtcamel.co.uk/ask-cca-agreement-for-debt/ as if some of your debts were loans or credit cards and have been sold to debt collectors, the creditor may not be able to produce the right paperwork in which case you could just stop paying them.
Jayne says
Yes it’s definitely something I’m starting to look at, and thank you I will look at both of those links. Thank you!
Jennifer Vincent says
Hi I had a debt with HSBC that was sold to Metropolitan collection agency. I have a very small payment plan in place monthly which I am still paying. I moved 6 years ago but forgot to update my details with them. I just kept paying the debt automatically through the bank. Recently I thought I would like to clear the debt by making an offer but the collection company seems to have closed down and I can’t contact them. I suppose they have not been able to contact me. I guess the debt has been sold on. How do I find out who owns the debt now?
Sara (Debt Camel) says
They may have been collecting for HSBC. You could contact HSBC and ask them.
D says
Hi everyone.
I have a two year old debt that has gone to a collection agency.
I’ve made an agreement with this company to pay the debt and have noticed they have added an entry to my credit file with these details and the credit score has taken a nosedive going from 350/500 to 160!
Can they do this?
I’ve worked exceptionally hard over recent years to recover from a divorce and repay what I owe and have finally got things where they can be rectified. Being at the point where I feel able to make the final step in the recovery and buy a house within the next two years this feels like a real kick in the teeth and I’m seriously considering going nuclear and declaring bankruptcy.
I’m that annoyed by the whole process of the ‘modern’ credit system.
Given the original debt has defaulted, still appears on my credit report and shows the missed payments etc, how could this be allowed?
Thanks in advance and keep up the good work Sara!
Sara (Debt Camel) says
what credit report are you looking at that gives you a score out of 500?
D says
I used that as an example – couldn’t remember the exact figure!
The main point is that my rating is now lower than it was at the time I hit rock bottom and its lower because I’m doing the right thing and addressing the debts I have :(
Sara (Debt Camel) says
ah ok, I thought it was weird.
A debt that is being repaid by payment arrangement should damage your credit score as you are not making the agreed payments. A default can be added if you are behind by 3-6 months.
What did the original lender record this as on your credit record?
When did you stop making payments to this – was it a long while ago?
Have you looked at the credit reports with all 3 credit reference agencies, as they will not all show the same information? See https://debtcamel.co.uk/best-way-to-check-credit-score/?
Are you making payments to a lot of debts that no longer show on your credit records?
D says
Already original lender has already marked my file as defaulted.
My issue is the debt effectively appears twice (on all three reports), the debt collecting agency having started a new account.
Payments were stopped around 3 years ago and I’m now in a position (thankfully) to begin making repayments.
I’m just amazed that I can have 2 entries on my file for the same debt – and annoyed that this will impact my ability to consolidate debt and finally get myself straight.
By my (admittedly rough) reckoning it’s added nearly a year to the time I will become debt free.
This is all coming after nearly 5 years of hard work to get myself straight and just feels unfair!
Thanks for the reply btw.
Sara (Debt Camel) says
the debt collector has used the same default date as the original lender?
John Bull says
Hi
I was paying a debt that had a default applied on march 2015, I stopped making payments in June 2018 but no action was taken by the company until now where a new business is now chasing me for payment
This debt is not on my credit file anymore, can they continue to chase me?
Sara (Debt Camel) says
what sort of debt was this? Credit card, loan, overdraft, utility bill or what?
John Bull says
It was an overdraft of approx 1500
Sara (Debt Camel) says
So yes you do still legally owe the money.
The fact it has dropped off your credit record does not mean it is statute barred – that cannot happen until it has been more than 6 years since your last payment.
If it has been a loan or acredit card you would have some other ways to dispute if it is enforceable in court, but they are not relevant for an overdraft.
I suggest you make a monthly payment arrangement.
They may accept a full & final settlement offer if you are in a position to make one? See https://debtcamel.co.uk/debt-options/less-common/full-final/
Doug says
Hi,
I split up with me ex back in early 2015. The gas/electric bills were in my name only. The supply was being paid for using a key meter.
I didn’t close the account as it would have meant my ex and children possibly having no gas and or electric.
I recently had a letter from Lowell saying the debt had been sold to them.
As it was well over 6 years since I moved out, I sent a statute barred letter to them.
They are saying a payment was made in February 2016. I know categorically that I would not have made this payment, so it would have been made by my ex.
It’s my fault for not closing the account at the time, but if I can show that I wasn’t living at the address and didn’t make the payment, can I claim statute barred? Or do they need to prove that I did make the payment?
I know Lowell are now taking things to court, I have been working hard to pay off old debts and sort out my credit score in the years since our split and would not want a CCJ showing now. I am worried that they will be more aggressive in pursuing this now I have claimed statute barred status.
Many thanks
Sara (Debt Camel) says
I didn’t close the account as it would have meant my ex and children possibly having no gas and or electric.
Hardly, they would just have changed the name on the account.
I know Lowell are now taking things to court,
They have sent you a Letter Before Action?
I suggest you talk to your local Citizens Advice. You need to know what period this debt covers. And may need to go back to the energy co and tell them when you moved out. Also how come a debt has been run up on a key meter supply? It is pretty unusual.
Anon says
Hi, I had a Barcalycard credit card (opened in around 2003) which I managed well for many years with a credit limit of £2k. Between November 2016 and Feb 18 the limit increased several times up to £10,200. Also during this time I opened 3 other credit card accounts as my finances got really bad. I set up a payment plan with all creditors in September 2018 but never missed any payments and they all defaulted.
My Barclaycard debt was sold to PRA Group in Feb 21 and I have been paying them £30 a month as per the original payment plan.
I have requested the CCA agreement from PRA and they have replied to say they have requested the information from Barclaycard.
If they are unable to provide this, does that mean they cannot enforce the debt and I can stop paying?
The account is defaulted in September 2018 but shows a default notice every month since on my credit report. Would this dissapear from my record after September 2024 regardless?
Sara (Debt Camel) says
If they are unable to provide this, does that mean they cannot enforce the debt and I can stop paying?
yes.
Would this disappear from my record after September 2024 regardless?
yes. But if they can produce the CCA agreement then you will need to keep paying or they will probably go for a CCJ.
The other option here is to complain to Barclaycard that they increased your credit limit to high so it was unaffordable. See https://debtcamel.co.uk/refunds-catalogue-credit-card/. If you win that complaint your debt will be reduced – which doesn’t much matter if they can’t produce the CCA agreement, but I suggest this is worth trying for if they can.
Fiona Hearn says
Hi
I have a DMP with Step Change, now in my 6th year. I have7 debts, cc / loan / catalogue etc, only 2 of which are still showing on my credit report and one of those is due to expire at the end of this month. I have asked for the credit agreements in feb 21 and only one has produced a file but this default no longer shows on my credit file, the others have either not responded or I received a standard thanks for your request letter.
It is clear that these debts have been sold on a couple of times.
If I stop paying, would they be able to enforce any action? Morally I feel I should approach them offering a settlement.
Any advice on the steps I should take would be most welcome
Thank you
Fiona
Sara (Debt Camel) says
Can I check that you have asked the current creditor to produce the CCA agreements, not the original lender.
The debt that is still showing on your credit record that will not drop off at the end of this month – is this defaulted? or just showing as in a payment arrengement?