Welcome to the forum joytocu2.

There appear to be a number of interwoven issues here so I think we'll need a response from one of our insolvency professionals.

I'm sure Mark, David or Kevin will be along in due course to share their thoughts with you.

I think there are a number of points here. The Prescription and Limitation (Scotland) Act 1973 generally state that if there has been no decree or admission of debt then they have a 5 year time period after which it is unenforceable. If this is not done then the time period extends to 20.

The debt, from my understanding, is due to DWP and the sequestration would, in effect, accept the claim and therfore the statute of limitations would not apply. The nature of the debt may also be excluded as an overpayment.

Mark

At the time of sequestration my accountant informed me that he would put this down as a loan that could not be repaid to the DWP and obviously I assumed as he had documented this in the paperwork that I was going to be exempt to pay it. There letter states that since the absence of payment or acknowledgement of the sum between 1997 and 2003 that they cannot enforce payment but would deduct it from any future benefits or pension - I assume from that they as they didn't chase me for it from 1997 to 2003 that they could not push me into paying it? Could you advise if they could push me to pay this and what I should write back and advise them as me sending letters back just isn't stopping them

I don't think the accountant putting this down as a loan will have any bearing on matters as it does not change the nature of the debt.

I think the letter/time period which has elapsed stops them pursuing the debt down the legal route and the only avenue open to them would be to deduct this from future benefit payments as opposed to wage arrestments etc.

Mark

Am i able to use the fact that they hadn't chased me from 1997-2003 so the debt is written off - I was informed that it would be illegal for them to take it out of any future benefits or pension and I wonder why they are using the 20 year term as I have umpteen letters from them stating that they cannot enforce itAm i able to use the fact that they hadn't chased me from 1997-2003 so the debt is written off - I was informed that it would be illegal for them to take it out of any future benefits or pension and I wonder why they are using the 20 year term as I have umpteen letters from them stating that they cannot enforce it

Hi joytocu2.

I think there might be a difference here between a debt being unenforceable and it being written off. They're possibly two different things.

Unenforceable means I couldn't use the legal process to make a recovery from you. It might not mean that you don't still owe me the money.

It is difficult to comment as you would need to know exactly what they are hinging matters on. They may not have pursued you for the debt, however the sequestration may have admitted the debt and therefore the argument that they did not pursued you would fall.

You mention you were advised that it was illegal for them to take payment from future benefits, however you do not state who made this statement and the reason for making it. If you have it in writing from DWP, then there should be nothing to worry about, if it is from another party, then you should ask them to clarify why they cannot.

I think a straightforward letter to DWP asking 1. If they are able to pursue you through legal channels for the debt and 2. If not, what options are open to them to recover the debt and under what specific part of the legislation are they able to this.

Mark

In terms of Prescription of the debt, the law states that if a decree has been obtained or there has been a decision by a tribunal, then the period of 20 years applies. I guess in this case there may have been such a decision.

The issue of whether the debt should have been discharged by the sequestration or not is a murky area and is something I looked into quite recently as it happens. There have been legal cases on both sides of the border in this regard. DWP have taken the view that if an overpayment is not identified until after the date of sequestration then they have the right to recover the funds regardless of the sequestration. It is only if the period of the overpayment starts and finishes before the date of sequestration that they will write off the liability at the end of the sequestration period.

I think this could well be challengeable in court, however that is the policy they have adopted based on an English case and it seems that the Accountant in Bankruptcy has accepted this position, so unless someone does actually take it to court and challenge it then it will remain so.

the upshot of all of this is that I'm afraid that you may well find that you have to repay this debt at some point, joytocu2. I'm sorry to have to say that as I'm sure this is not what you wanted to hear.

You could always seek legal advice about challenging them - however I guess this could be a costly process...

I have been getting very confused with this as in one hand they say they can't pursue me as they haven't chased me from 1997-2003 and that means this is over 6 years old. The next they are saying the Prescription & Limitation Scotland Act 1973 provided the 20 year period has not expired states all avenues of recovery remain open to the department then they have other means to get it. I had went onto the site of Just Answer.com and the lawyer there advised that the prescriptive period is 5 years and not 20 and they are not entitled to pursue me and that if they tried to deduct it from benefits etc in the future I could take them to court. As far as I was aware up until 2008 this debt wasn't there. If I have to pay it then I will have to but they are admitting to me that they were wrong and hadn't chased it in the first 6 years - I am sorry to pester you but I thought with ironing out all my debts and not burying my head from my debts that I would be able to move forward

Kevin - I have copy paperwork from DWP showing the dates that they are claiming back and they are from 24.07.95 until 12.06.1996. and as you say Kevin this would be in the timescale that you say it was before my sequestration date of November 1996 so should they not have written off the liability? I am unaware of any decree or a decision from a tribunal regarding this and if so should I not have been aware of this?

As I understand it, if the period of the overpayment is entirely before the date of sequestration then the debt should have been discharged by the bankruptcy, except if the debt was as a result of fraud.

If you google "HB General Information Bulletin G10/2013" you should find a DWP bulletin making reference to this in point 35. This is in relation to Housing Benefit overpayments - I'm not sure if your overpayment is in relation to Housing Benefit but if not then I don't see why the same principle doesn't apply.