The week’s events, 

Major upheaval in the court looms if MoJ goes ahead with changes in civil debt

So the Ministry of Justice (MoJ) is considering reducing the statute of limitations for civil debt from six years to three.  If they decide to push this through and don’t phase it in then there will be massive upheaval in the courts as many lenders and debt recovery firms will have to commence proceedings overnight. Some estimates have been put at 50,000 new cases immediately to get in within any proposed new time limit.

The Limitations Act 1980 outlines the time limit within which a creditor can pursue a debtor for outstanding debts and only applies when no contact has been made between the creditor and debtor within the given time limit. This Act applies to residents of England and Wales.

Lenders are given a fixed period of time to chase their debtors and the time scale mainly depends on the type of debt and can be extended at the courts discretion. The time limit begins when you a borrower last admitted owing the money or made a payment.

Some will argue that it should not be reduced from six years to three; I am probably in that camp as well. A lot can happen after three years, sometimes the borrowers circumstances may have improved to such an extent that they are then in a position to make payments on their previous debts after all.   This is still in its consultation so we will have to wait and see.

Full article can be found here

More on the Limitation Act and template letter can be found here

Bank charges latest news

It’s nearly two years since the FSA put in the waiver on court claims for unfair bank charges linked to unauthorised overdrafts. 

If the banks win then that will probably be the end or I understand the OFT would still be willing to carry on.

If the OFT win then it will be the end of the first part of what is basically a two-part test case, with this victory settling the issue of whether the OFT can assess if bank charges were fair or not. 

The second part of the case will be what the OFT regard as a fair level of overdraft charges, if any. The banks’ could then challenge what the OFT recommends as a fair charge, they may decide that there should be none or very little. Whatever the OFT comes up with this may invariably lead to more rumblings in the Court. A win for the OFT could also bring about the end of free banking, some would argue that has already ended. 

The banks currently receive 2.6 billion per year from bank charges and this is hefty revenue that they will need to keep. So it hey lose the appeal, which I suspect they know they are going to they will tweak the bank accounts and credit cards even further to get that revenue back. What is worth remembering is that when all this started the banks were independently owned and now many are owned by you and I the tax payer and government. 

The outcome of the appeal is due in the autumn.

Full article can be found here

More on reclaiming charges for personal accounts, credit cards and financial hardship rules can be found here. 

Scum and scam

It is criminal and frustrating that these firms are once more preying on the desperate, vulnerable and often gullible consumer. 

Spread the word, you cannot just simply sell on your debt and its liabilities. Anyone that feels they have a debt problem should seek advice from our list of helpful organisations or ask us for a review of their finances. 

Full article can be found here

Don’t get confused with unenforceable credit card and loan agreements, this is totally different.