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A financial obligation could be statute banned (too old to pursue) due to the fact Limitations of Actions Act 1958 (Vic) puts a restriction in the time a creditor has got to just simply take appropriate action to recover a financial obligation.

There are certain good reasons for having a period limit for a creditor taking action that is legal including:

  • in the future, appropriate evidence will be lost;
  • it really is oppressive, also “cruel”, to a defendant allowing an action to long be brought following the circumstances which provided increase to it have passed.[i]
  • If your creditor begins court action against you, while the financial obligation is statute banned, you’ll have a total defence to your action.

    If you tell a creditor which you think a financial obligation is statute banned, the creditor are going to be not likely to start out any court action against you.

    The Privacy (credit scoring) Code 2014 a credit scoring body must, upon demand, eliminate default information that pertains to a statute-barred debt.[ii]

    6 YEAR LIMITATION PERIOD

    A creditor must begin court action to recover the debt within 6 years of the date for most debts

  • which you endure made a repayment; or
  • which you admitted on paper you owed your debt.
  • The limitation duration begins through the latest occasion within the above list.[iii]

    15 YEAR LIMITATION PERIOD

    The creditor has a lot more than 6 years to get your debt including if:

  • a court judgment was entered, in which particular case a 15 limitation period applies for new actions (such as some bankruptcy proceedings) year;[iv]
  • your debt pertains to home financing over home in which particular case a 15 limitation period applies year. [v]
  • They are complex dilemmas and advice that is getting suggested.

    REQUESTING EVIDENCE

    Unless you’re certain a vintage financial obligation is perhaps not statute banned:

  • usually do not acknowledge which you owe your debt;
  • try not to produce re re payment;
  • usually do not accept a creditor’s term that you borrowed from your debt.
  • You need to request details of the so-called financial obligation and look for advice straight away.

    Make reference to our test letter: Asking for proof below.

    Once you’ve gotten the details through the creditor, get advice in one for the listed associates to make certain you understand your legal rights.

    FOLLOWING THROUGH

    Then send a letter to the creditor telling them this if you believe that an old debt is statute barred get advice and. Relate to our test letter below: Alleging a financial obligation is statute banned

    Make reference to our factsheet I’m being hassled by a debt collector for just what doing if you’re being hassled by a financial obligation collector.

    AN OLD DEBT IF YOU HAVE PAID OR ACKNOWLEDGED

    This may be misleading and deceptive or unconscionable if the debtor has not had the opportunity to obtain legal advice if a creditor represents that legal action will or may be taken when a defence at law applies.

    Look for legal advice to discover whether you are able to argue that as the conduct for the creditor you really need to continue to have the main benefit of your debt being statute banned.

    Collection House v Taylor [vi]

    Taylor had been contacted about a 10-year-old financial obligation by a debt collector functioning on behalf of Collection home. Your debt collector stated that when re re payment had not been made action that is legal be an alternative. Taylor didn’t realize that your debt ended up being statute barred.

    Taylor consented she’d spend $4,500 online payday loans Kansas on her behalf charge card immediately, and that she’d arrange a $500 boost in her charge card restriction so that you can spend the total amount.

    Taylor took appropriate action to get her cash back. The Supreme Court unearthed that Collection home had involved with unconscionable conduct.

    IN THE EVENT THAT CREDITOR TAKES LEGAL ACTION

    In the event that creditor takes action that is legal get legal counsel straight away: see more information below. Small amount of time restrictions use to do this.

    It really is your responsibility to increase the defence that your debt is statute banned if you were to think it is applicable. That you must repay the debt) if you do nothing, the creditor might get a court judgment (.

    The creditor will have up to then 15 years – or perhaps more – to enforce the judgment.

    A complaint to the Financial Ombudsman Service or the Credit and Investments Ombudsman before judgement is entered will have the effect of stopping actual or threatened legal action in relation to credit debts in cases where the debt arises out of a credit contract.

    A court judgment will be entered against you if you do nothing.

    Test Letters

    paragraph 20.6, Privacy (Credit Reporting) Code 2014 (Version 1.2)

    Limitation of Action Act 1958 (Vic) s 5(1) and 24 – 26

    Limitation of Action Act 1958 (Vic) s 5(4), see Dennehy v Reasonable Endeavours Pty Ltd [2003] FCAFC 158

    Limitation of Action Act 1958 (Vic) s 20

    More info

    Customer Action Law CentreTelephone: (03) 9629 6300, or 1800 466 477 for country callers.

    You can call through the National Relay Service (NRS) if you are deaf or have a hearing or speech impairment,:

  • TTY users can mobile 133677 then ask for 1800 466 477
  • Talk & pay attention (speech-to-speech) users can mobile 1300 555 727 then request 1800 466 477
  • Web relay users can hook up to NRS .au then request 1800 466 477
  • Financial Ombudsman ServiceTel: 1300 78 08 08h

    Credit Ombudsman ServiceTel: 1800 138 422

    MoneyhelpTelephone: 1800 007 007

    Warning: this known reality sheet is for information just and should never be relied upon as legal counsel. These records is applicable only in Victoria and ended up being updated on 31 2015 december.