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Patrick H.
Patrick H., Lawyer
Category: Australia Law
Satisfied Customers: 5367
Experience:  Dip Law LPAB - Sydney based lawyer
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My understanding is that if a credit card debt is the subject

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My understanding is that if a credit card debt is the subject of a court judgement in Canberra the period for recovery of that debt is limited to a fixed 12 years. So when along the way a second debt is incurred with the same provider and that separate debt becomes part of a scheme of arrangement to pay it down does the judgment and the 12 year limitation on the first debt stand alone from the second or does it get extended?
If the debts arise under separate credit agreements (the agreement you would have signed when applying for the credit card) then the cause of action of each is separate and the limitation period for any breach of either agreement would run separately.

If the later agreement was a renewal, or reinstatement of the original credit card agreement, then arguably the limitation on the original debt would reset, though it may depend on the exact terms on which the credit arrangement was renewed or reinstated.

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Thanks in advance,

Patrick.
Customer: replied 3 years ago.

Hi,


 


Thank you for the advice but the website says I can request more information, your answer raises further questions:


 


The first debt was to one provider. Years later we had a credit card to a different provider. The first provider then purchased the second provider, saw our name and cancelled the card and then handed it to a collection agency which I entered into a payment arrangement with. The question of the first debt remains - is it treated as a separate debt that once 12 years has past it is unrecoverable?

Because the original debt was separate the limitation period on it will run separately.

I trust the above assists.

Please rate my answer so I can be paid by the website operator.

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Thank you and good luck.

Patrick
Customer: replied 3 years ago.

Hi Patrick,


 


I know it is late & your answer if correct is excellent and I will rate it as such, I just need clarification on one fine point.


 


So you are saying the first debt stands alone because it was with the original provider (despite their motive for cancelling our card which I assume is that we did not pay the original debt despite the court order).


 


AND this remains the case even though they purchased the second provider.


 


I ask because somewhere along the line we may have signed a renewal contract with the first provider when they bought the second provider as a provision of the takeover and the continuing credit arrangement under new owner (in this case our first provider)?


 


Regards

Their taking over the debts of the original credit provider should be irrelevant unless you entered into some arrangement to merge the debts. Absent that they are separate issues. You will need to check whether there was any renewal contract as this may have included some term which effectively merged the debts (in which case the limitation period may reset depending on what this agreement says. Without such an agreement the limitation periods are separate.

I cannot see that their cancelling your card on the second account has any relevance save that based on their experience on the first card, they did not consider you a good credit risk. It does not change their rights in relation to the first debt (unless you signed a new agreement in some way merging the two).

I trust the above assists your understanding.

Please rate my answer so I can be paid by the website operator.

Please note I am only paid if you rate me with three or more stars/smileys.

Thank you and good luck.

Patrick

Customer: replied 3 years ago.

Hi Patrick, sorry to extend this, there was no new specific agreement to merge the two debts, but in your experience is it common for "standard" fine print in credit card providers to try to do this, I don't remember any "all in" global clauses but there could have been.

So called 'standard' fine print in credit contracts can vary considerably and changes over time, and a detailed knowledge of such in credit contracts is beyond my experience (I am quite familar with all sorts of contracts, but not sufficiently with credit card ones to have a firm view about their standard clauses.

All I can say is that banks are quite good at including such clauses in the contracts they draft, but even if they did include such a term you may be able to challenge it if it was not sufficiently brought to your attention or you did not understand it, but unfortunately only a lawyer familiar with all the agreements in question, particularly any you signed which might have 'merged' the debts, as well as the circumstances in which you signed them can give you firm advice on this point.

keep in mind the onus is on the credit card company to prove they have a contractual right to pursue any such debt, so if it becomes an issue they will need to produce all these contractual terms and identify the basis on which they seek to bring any claims on debts which would otherwise be out of time.

I trust the above assists your understanding.

Please rate my answer so I can be paid by the website operator.

Please note I am only paid if you rate me with three or more stars/smileys.

Thank you and good luck.

Patrick
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Customer: replied 3 years ago.

Thanks Patrick, I thought so, the onus would be theirs and difficult to now after 13 years then pursue an old claim based on an unrelated takeover, have a nice night