car finance

[ruskyrab]

i took out car credit 7 yrs ago.i stopped paying it because the finance company went bust,but another company took the debt over and they didnt contact me for 5 yrs,even though i tried to call them and sort it out,now 5 yrs later,they got their laywers to me and say i owe them 6500,do i have to pay it?is there anything i can do?ive not heard any thingfrom them for 5 yrs,not until now

[anniebird]

Unfortunately the time limit on debts is 6 years. As they have left it so long perhaps you can arrange to pay the original instalment amount and number of payments. This would leave them out of pocket by interest in the intervening time but as you tried to sort it out and they did not respond they may agree. Do not be surprised if they do not like this suggestion.

[themas]

Is this a hire purchase agreement (in which case you do not own the car until it is paid off), or is it that you borrowed money to buy a car, which is in your name and owned by you?

If hire purchase, it's amazing they have left it this long, but you will have to settle it somehow if you ever want to own the car. Making payments over a period of time ought to be accepted by them, if you can show them your finances are such that you cannot pay it all at once. You also need to make sure the amount they are demanding is correct. But they might be able to repossess the car if you can't come to an agreement.

If it is not HP, then their next step if you can't reach an agreement to pay over a period (i.e. as above) would be to go to Court for a County Court Judgement. If they get this it would seriously affect your credit rating. However, as annie says there is a statute of limitations which means that they cannot enforce the debt through the Court if 6 years has passed since the last payment or acknowledgement of the debt. If you are very near the 6 years from the last time there is any evidence that you acknowledged the debt, then if you do nothing now you may get to 6 years before they try to go to Court, so they would not be able to enforce the debt. This does not mean the debt disappears - you would still owe it but would be in a stronger position to settle it for a smaller amount.

[innocenti]

I would ask them for a copy of your original signed application form. If they cannot produce this they cannot enforce the debt and cannot take you to court. Check out the Consumer Action Group, they have all the templates you need including a "Prove the debt" letter