NEWS...
Ministry Pushes Ahead with Limitation Reduction Scheme
Collections industry emphasises need for time to make transition.
Last month the Ministry of Justice met representatives from the debt collection industry to discuss proposals to change the statute of limitations for civil debt.
The Ministry also published a consultation paper on government plans to change the time civil debts can be chased from six years to three. The CSA, which represents debt collectors, is concerned the transition to a new system could have an adverse effect on debtors, the industry and the courts.
Sara de Tute, compliance director for the CSA, said the organisation will gather views from members before responding to the consultation.
"It is debt collection and debt purchaser focused," she explained.
However, she added: "It is likely we will oppose the cut.
"At the moment we don't know when it would come in and how it would be phased in - whether there would be transitional provisions or whether it would be retrospective."
Industry commentators also expressed confusion over government aims, saying the Ministry's proposal would encourage earlier litigation while the Department for Business, Innovation and Skills is actively encouraging creditors and collectors to allow debtors breathing space.
One debt buyer said the Ministry runs the risk of creditors litigating on tens of thousands of cases overnight. He added that creditors and debt buyers would be forced to litigate quickly against 'gone aways' using the last address - obtaining judgment by default.
De Tute added that a disorderly transition would place great strain on the courts system which is already under significant pressure.
"I don't think the courts could cope with it," she said.
Original article courtesy of Credit Today. For further information visit www.credittoday.co.uk
