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Question
Posted by: Lolly | 2010/06/18

Question about credit

How long does a creditor have or how long does a defaulted debt stay valid for legal action to be taken against a defaulter or listing them. After listing a debtor on a credit beaurough, does the creditor still have a right to claim what''s owed to them, even after the defaulting has reached an expiry date on the credit beaurough?

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Our expert says:
Expert ImageFamily law expert

The law says that, if your creditor does not take judgment against you within 3 years of you defaulting on payment of an account, then you can rely on the defence of prescription, by arguing their claim has lapsed or expired. For this reason creditors usually issue summons within three years from the date of non-payment to avoid the claim lapsing. Unfortunately, many creditors, collection attorneys and debt collectors try to collect even when the debt is older than three years. Collection attorneys often attempt to persuade you to make payment of a small amount as this payment will interrupt the three year prescription period and render the defense of prescription null and void until a further three year period has elapsed. For this reason you must not make any payment however small towards any old debt (as any payment will amount to an admission of liability) and you must likewise be careful not to admit liability verbally or in writing for the debt.

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Our users say:
Posted by: family law expert | 2010/06/18

The law says that, if your creditor does not take judgment against you within 3 years of you defaulting on payment of an account, then you can rely on the defence of prescription, by arguing their claim has lapsed or expired. For this reason creditors usually issue summons within three years from the date of non-payment to avoid the claim lapsing. Unfortunately, many creditors, collection attorneys and debt collectors try to collect even when the debt is older than three years. Collection attorneys often attempt to persuade you to make payment of a small amount as this payment will interrupt the three year prescription period and render the defense of prescription null and void until a further three year period has elapsed. For this reason you must not make any payment however small towards any old debt (as any payment will amount to an admission of liability) and you must likewise be careful not to admit liability verbally or in writing for the debt.

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