# Credit Union - small debt from 20+ years ago



## snuffle (26 Nov 2010)

Hi, just wondering if anyone would be able to help me out here.

A family member took out a loan with the Credit Union 20+ years ago, they had approx £300 left to pay off on it, were paying off an amount weekly. They also had approx £200 shares saved with the Credit Union.

For various reasons, that debt was somehow overlooked by the family member (moved house, new job, new baby, thought they had paid off more than they had, plus a whole host of other things) and the Credit Union didn't follow it up either (if they had been reminded of it, naturally they would have kept up repayments).

Flash forward to yesterday - a letter in the door, addressed to family member by name but with the wrong address, the letter had been from pillar to post and finally found it's way there - the Credit Union are now looking for the original £300 (now €400 or thereabouts I think) plus interest of approx €800 added. Now this family member is obviously older, they are out of work after 40 years of working fulltime, and on social welfare.

They are very worried as to what will happen if they cannot afford to pay this debt (and to be honest, they can't really afford it).

My questions are - how long can an institute chase someone up for debt? I was under the impression that there was some limit as to time elapsed? Surely by this stage that debt should have been written off as a bad debt?

Also - should the shares of £200 have been used to offset the £300 owed at the time, therefore at least bringing the interest portion of the debt down?

I can't really believe a credit union are chasing down a small debt from over two decades ago, when there's plenty out there defaulting on huge loans.

Any and all help would be appreciated, thanks in advance.


----------



## Brendan Burgess (26 Nov 2010)

The debt may be statute barred if they have made no effort to collect it for 6(?) years. 

However, this is a debt and they should pay it. If the net debt was €100, they should offer  to pay that plus reasonable accumulated interest. 

Brendan


----------



## Crugers (26 Nov 2010)

> _and the Credit Union didn't follow it up either_


Well they may have but maybe the other letters didn't go "_from pillar to post and finally found it's way there_".


> _...how long can an institute chase someone up for debt_


As far as I know they can chase it forever but if they fail to chase it for a period (5 years?) it is statute barred.


> _...Surely by this stage that debt should have been written off as a bad debt?_


According to the Standard Rules of ILCU affiliated CU's, yes, if no payment was made within a calendar year it should have been written off. But that doesn't mean the debt disappears or is not still due!


> _...should the shares of £200 have been used to offset the £300 owed_


If it was being written off that is what would happen. Actually the interest outstanding (at W/off date) would be taken out of the Share balance first and the remainder of the shares used to pay off some of the outstanding debt.


> _...I can't really believe a credit union are chasing down a small debt from over two decades ago, when there's plenty out there defaulting on huge loans._


I believe they are trying to collect any and all monies due large, medium and small amounts!

What to do now!
Get reliable confirmation that the statue of limitations hasn't been exceeded i.e. that the debt still stands.
If the debt still stands then approach CU and get agreement that interest shouldn't have accrued over the whole period, on the whole amount.
Agree a settlement figure to be repaid over an extended period i.e. €1 per week or per month...

I can't see the CU spending too much time chasing such a debt especially when there are so many questions about how they managed it so that the original net due £100+ has now increased to €1200...
I think the courts wouldn't be too supportive of their case!
HTH


----------



## snuffle (26 Nov 2010)

thanks very much for your replies, Brendan and Crugers, appreciate it! Have a bit of a better handle on things after reading that.


----------



## dereko1969 (26 Nov 2010)

presumably there's a significant build up of dividend payments over the years too? ask them have they been adding them to the original shares?


----------



## snuffle (26 Nov 2010)

Good point, Dereko1969, will get them to look into that, thanks  
Have told the family member of all the points raised in this thread and they are feeling a little less panicked about the whole thing (they were worried they'd be hauled into court immediately and be forced to pay it all off at once) so thanks to all for the help.


----------

