Hi

Client had a social fund loan over 10 years ago. She is no longer claiming any benefits, She has now been contacted by a debt collector. Is the debt still recoverable or does it come under the Limitations Act 1980 as she hasn't had any contact from them for over 8 years.

I know that overpayments can be recovered from benefits, however old they are, but does that apply to loans as well.

Thanks

The Statute of Limitations applies, but the debt collectors will very likely argue that it doesn't! (I have had this 2 or 3 times.)

But all it means is that they cannot enforce the debt by Court action. The debt still exists (assuming your client actually owes the money) and they can still chase her for it - or muck up her credit rating. Also, I believe that when she gets the State Retirement Pension they will be entitled to deduct it from that.

The debt does not die as Kevin says. All the Statute means is that the one easy method of enforcing it is unusable. If the person to whom a debt is owed comes into possession of money owed to the debtor - money in a bank account for example if debt is to that bank, or income due to be paid to the debtor, they have an indefinite right of offset.