I recently helped a reader resolve a £1500 debt that was being pursued by Sheffield City Council.
Not only did the reader dispute owing the debt, but Sheffield City Council refused to submit any statement of accounts or court judgment to prove the debt was owed. Worst of all, the debt was over ten years old.
No matter how hard the complainant appealed or denied owing such a debt, the council insisted that the burden of proof that the debt was not owed fell upon her shoulders.
So I wrote to Sheffield Council on her behalf asking them to clarify a few facts of law. The most significant paragraph is at point 3.
Dear Sheffield City Council,
I am in receipt of your letter dated 26th September 2014 in which you make threat of bailiff action in response to an alleged debt of £1,446.61.
As a result I have sought legal advice and this letter is to inform you that I dispute this debt in its entirety. I further dispute your lawful authority to collect this debt and would make the following points:-
1) I have made repeated contact with Sheffield City Council in relation to my dispute concerning this matter. They have been entirely uncooperative and unhelpful throughout, insisting that the burden of proof that I am not liable for this debt remains solely upon me. Unless Sheffield City Council or their collection agents can submit proof of account records, invoices or statements (which have been repeatedly requested) in relation to this debt then this dispute will remain unresolved.
2) No summons in relation to court proceedings were ever received by myself. If they had, I would have attended the court to dispute the alleged debt. I would ask that you forward me a copy of the judgment and/or warrant against my name or any corresponding court identification or reference numbers. If such a judgement exists and proves to be valid I will contact the issuing court and ask the judgement be set aside due to the initial summons never having been received.
3) The debt you are pursuing is over 10 years old. Please submit any recent court documents or legal authority that proves that you are not attempting to collect a debt that is statute barred and contrary to the Limitations Act 1980.
4) The ongoing failure and refusal of Sheffield City Council to settle this dispute via amicable means is a breach of your duty of care. Your attempts to collect this debt, contrary to the points outlined in this letter are causing me considerable alarm and distress, and are an interference of my rights to privacy and a family life.
Any further unwanted letters of demand, bailiff visits or threats of any kind from Sheffield City Council and its enforcement agents will be considered harassment. If they continue I will not hesitate to seek remedy via the civil courts for an injunction against you as well as compensation for the time I have wasted dealing with this issue.
As a result of this letter, Sheffield Council promptly eradicated the debt.
“Thank you for your email.
Having examined the archive notebooks and in view of the age of the debt it has been agreed, as a gesture of goodwill, to write off the full outstanding balance of £1445.61.
I can confirm that the balance on the above accounts is now £0.00.
If you have any queries or require further information please contact me again.”
To put my letter into context, The Limitation Act 1980 prohibits the recovery of debts over 6 years old (from the first day the debt incurred). Just as long as the customer has not acknowledged owing the debt in writing or by making a payment during that limitation period. And it doesn’t matter if the creditor or local authority has obtained a county court judgement, as long as the debtor hasn’t written to the creditor or made a payment within those six years then the debt is a write-off and cannot be collected.
This doesn’t mean that the creditor will give up altogether. They may still write letters and persist with empty threats, phone calls and impotent debt collectors, but they will be unable to obtain any further court orders or warrants (or use any existing ones) to pursue the debt.
An attempting to use bailiffs to recover the debt – as Sheffield Council were threatening to do in this instance – would be unlawful.
The only caveat is that the statute of limitations does not apply to EVERY type of debt. There is currently NO time limit on collecting debts for income tax or duty. And Child Support and Child Maintenance debts are embroiled in a complex set of rules that may need an accountant or a Nasa scientist to explain.
For more information on statute barred debts take a look at this helpful factsheet prepared by the National Debtline.