Payments after a debt has prescribed
If a client starts to make payments to a debt which has already prescribed, these payments do not revive the debt. The debt is still ‘extinguished’ and legally no longer exists. The client can request a refund of any monies paid.
Example
Umar had a bank loan which he stopped paying when he received a default notice 10 years ago. The bank sold the debt to another company that has been actively pursuing Umar and threatening him with court action. Unsure about his rights, Umar began making payments of £5 a month a couple of years ago.
In this instance, Umar did not revive the debt by making payments to the new debt owners and is entitled to a refund of all monies paid. This company should have known that the debt was extinguished when purchased from the original creditor.