Many people in debt at the moment are understandably concerned with questions like this, including other questions such as “how long is it before my debts are written off” and “how long before my debt expires”.
These are good questions and on this page we will give you everything you need & the answers to the questions playing on your mind, so read on for further information.
For most types of debt, the law has in place a deadline for a creditor (the company or the lender you owe money to) to issue court proceedings to chase a debt before that debt becomes “statute barred” (The “statute barring” is what occurs after the six year “limitation period”). Meaning they cannot legally pursue the debt through the courts – this does not apply to all debts, we explain this in more detail below.
*If you would like a free review of your debts to assess your options with an expert adviser’ feel free to make contact with us using the form at the top of the page for confidential debt help.
- 1 How Long Can I Be Chased For Debts?
- 2 If you have a debt that is more than six years old
- 3 Is My Debt Written Off After Six Years?
- 4 When Does The Limitation Period Begin?
- 5 Can A Creditor Do Anything If A Debt Is “Statute Barred”?
- 6 What Should I Do If My Debt Is Statute Barred Or Limitation Period Passed (extinguished)?
- 7 Can A Creditor Begin Court Proceedings Once The Debt Is Barred?
- 8 What If My Creditor Has Issued A CCJ (County Court Judgement)?
- 9 Are There Solutions For Debts That Are Not “Statute Barred”?
- 10 The more formal debt solution: The IVA
- 11 The less formal debt solution: The DMP
- 12 I’m Panicking About Creditor Hassle! Help!
- 13 What Happens If I Choose To Ignore My Creditors?
- 14 Types Of Debt That Cannot Be Statute Barred
- 15 When do creditors stop chasing the debts?
- 16 I Have Council Tax Debts Over Six Years Old
- 17 What Happens If I’m Not Clear On Any Of The Information On This Page?
How Long Can I Be Chased For Debts?
This is largely dependent on some key factors:
(1) How long has the debt existed for?
(2) What type of debt is it?
(3) Who is the creditor? (or who are the creditors’)
We explain this in further detail below (this is worth reading through if you are particularly concerned about your debts).
If you have a debt that is more than six years old
In England, Wales and Northern Ireland, the limitation period is six years. This generally applies to your everyday common debts such as credit cards, store cards, council tax arrears, overpayment of benefits, rent arrears, catalogues, overdrafts, payday loans or personal loans.
Exceptions (Debts’ that the above rule does not apply to)
Claims for personal injury have a shorter limitation period (three years).
VAT, income tax, and other HMRC debts aren’t subject to this limitation period & the HMRC can chase debts dating back many years & can also start court proceedings if there are income tax liabilities.
If the creditor has issued a CCJ or a CCJ order (county court judgement) then the debt cannot become statute barred.
Shortfalls on mortgage loans have a longer period (12 years) but the interest has a limit of six years.
For everyday debts in Scotland, such as catalogues, loans, credit cards, store cards, benefits overpayments, overdrafts etc, the limitation period is shorter (5 years).
Exceptions to the limitation period:
Same as above in relation to income tax, VAT & HMRC debts
Mortgages has a limitation period of 20 years for statute barring in Scotland (this applies to the “capital” i.e the “money borrowed”)
Council tax and some types of benefit overpayment can have a longer limitation period of 20 years.
If the creditor has already issued a “decree” all debts are exempt from “statute barring”, meaning you could be chased for the debt indefinitely, unless you seek help from another source (be it a debt management company, or other advisory medium) or repay the debts.
Is My Debt Written Off After Six Years?
In terms of court proceedings, yes, once the debt has pased the limitation period it is classed as “statute barred”.
In terms of them sending correspondance to ask for payment, no, however because the debt itself is barred you are under no legal obligation to acknowledge the debt and if you respond to any requests after the six year limitation period, this could be taken as an “acknowledgement of debt” and thus could “reset” the limitation period, many would recommend you don’t respond to requests for repayments if the debt is extinguish (passed the six year limitation period).
When Does The Limitation Period Begin?
It begins from the last acknowledgement of the debt or payment from you to the creditor (which would count as acknowledgement).
This can be through communication, payment towards the debt, or the earliest opportunity from where the creditor could have taken action to pursue.
If the debt is joint, only the person who signed the creditor agreement can issue an acknowledgement of the debt, not their partner, this wouldn’t count as an acknowledgement.
If a letter has been issued addressing the debt from a third party, this also counts as acknowledgement, be it debt solutions advisers’ or debt management advisers’ or other legal third parties, letters from these organisations would also count.
Speaking to your creditor by phone, receiving a letter from the creditor, or a letter from the creditor informing you that you don’t owe the debt doesn’t count as an acknowledgement.
As stated above, a payment towards the debt also counts as acknowledgement.
If you have made a debt repayment this would have “reset” the limitation period because you have acknowledged that you owe the money by making a payment.
Finally, The earliest date a creditor could have taken action to recover any debt
This is a changeable factor depending on the type of debt
With most common forms of debt (loans, credit cards, payday loans etc), this would be the time from which you received a letter as a warning informing you that you may default on the loan/credit card/payday loans repayments.
There will have been an indication as to how many missed payments before the debt is in a “default” status or if how many missed payments before the account is closed (for example if it was three missed payments, it may be three months) the six year limitation period would begin from this period.
*If you require expert guidance on debt issues you can get in touch with us for a free debt review to get some free advice and to be given some available options that may freeze interest and halt creditor hassle whilst clearing your debts over a period of time.
Taking all of the above into account, six years from the last acknowledgement of the debt is when the debt becomes “statute barred” as the “limitation period” has passed.
If you wish to figure out when a debt becomes statute-barred, take whichever of these events occurred the most recently then add the limitation period, this will give an accurate reflection.
Can A Creditor Do Anything If A Debt Is “Statute Barred”?
We begin this segment with a direct quote:
“The Financial Conduct Authority (FCA) say that it’s not fair for a creditor to keep asking you to pay a statute-barred or extinguished debt if you’ve told them you don’t intend to pay it.”
Basically if the debt has already passed the six year limitation stage, it is not fair or reasonable in the eyes of the FCA (Financial Conduct Authority) for you to continue to be pursued for the debt.
The FCA are the governing body for the trading practices of the many private financial services companies’, they also have the power to close companies’ down if they do not adhere to their regulations, so companies’ regulated by this body MUST adhere to FCA regulation.
In England, Northern Ireland & Wales
Unless the debt is DWP or HMRC related, there is no way they can raise a CCJ or make you bankrupt once the debt is statute-barred, this is because the debt is considered “extinguished” and it is no longer legal for them to chase you on that debt legally.
If the creditor is not FCA regulated, the creditor may contact you and ask for repayments or other contributions.
The law states the creditor can do nothing to collect on the barred, extinguished debt, in some cases if you have made payments once the debt is barred you may even be able to get a refund for those repayments.
What Should I Do If My Debt Is Statute Barred Or Limitation Period Passed (extinguished)?
This depends on whether or not you’re certain the debt has passed it’s limitation period.
If you’re uncertain it’s passed it’s limitation period:
We would advise you check your credit file and any documentation you may have at home to see if there are records of loans/credit cards/store cards or whichever type of credit you are wondering about.
If you are still not sure you can contact the creditor and tell them you believe the debt to be statute-barred and ask them to substantiate why they think you still owe them the debt (if you would like help with this you can get help from a debt help company like us & we can manage your debts on your behalf).
If you’re certain it’s passed it’s limitation period:
You don’t have to do anything.
You’re perfectly entitled to ask the creditor to stop contacting you by sending them a letter stating that you don’t intend to repay the debt.
Can A Creditor Begin Court Proceedings Once The Debt Is Barred?
Simply put, if the creditor cannot provide proof that the debt is NOT extinguished/statute barred they cannot legally pursue you in court for that debt.
If you can show the courts that the debt is barred and has passed it’s limitation period (statute barred) the courts will cancel the creditors’ case.
What If My Creditor Has Issued A CCJ (County Court Judgement)?
For any debts with CCJ’s issued in relation to them, there is no statutory time limit for the creditor to pursue that specific debt, meaning that in that case “statute barring” would not apply and there would be no time limit for the creditor to chase that debt.
Are There Solutions For Debts That Are Not “Statute Barred”?
If you have existing debts and are being chased by creditors’ we have different ways to help (again this will depend on factors):
Factors It Depends On:
1) Debt level
2) Types Of Debt/The Creditors’
The more formal debt solution: The IVA
If you owe mortgage arrears and tax arrears you may need to consider a more formal debt solution such as an IVA (Individual Voluntary Arrangement), which is a medium term plan to get you out of debt by negotiating with all your creditors’ and making your repayments more manageable over a period of time (generally 5 years’) after such a time your debt is considered to be repaid.
The IVA is a popular product due to it’s ability to write off large amounts of debt, however there are guidelines with an IVA (this is best explained by an adviser’) which requires transparency and commitment (feel free to get in touch with us and ask about an IVA today).
The less formal debt solution: The DMP
For lesser formal debts (personal loans, payday loans and other informal debts and lower amounts of debt) there is a less formal solution known as a “debt management plan”.
A DMP is a less formal arrangement but follows a similar principle to the IVA, however Income tax arrears or mortgage arrears cannot be input into a debt management plan and there is less legal restrictions on creditors’, however it is a product that is also very popular and has been proven to be effective for 100,000s of individuals. (We can also offer debt management services, get in touch to find out more).
I’m Panicking About Creditor Hassle! Help!
There is no need to panic, for most if not all debt issues there is a way out or a solution.
We are happy to review your debts on a no obligation basis and propose some solutions available to you that may help you reduce, manage, perhaps even write off large amounts of debt to get your life back on track again.
You could be looking back on your period of stress and worry in the near future wondering why you didn’t take action sooner, as many people who choose to engage the services we have described above have done, we can help get your creditors’ off your back and make your debts more manageable.
All contact with us is done on a confidential one-to-one basis and we publish no information about clients or potential clients.
What Happens If I Choose To Ignore My Creditors?
We would not advise you do this, ignoring your creditors’ can make matters worse, here are some friendly suggestions based on different scenarios.
1) If the debt is extinguished/barred/expired simply contact your creditors’ and explain you have no intention of paying the debt and ask them to stop contacting you.
2) If the debt is less than six years old and you are looking for help, make contact with us for a review of your debts and no obligation advice.
3) If you feel you can adjust your finances yourself, feel free to make the necessary life changes and repay your debts, (you could also attempt to negotiate a repayment plan manually, which you may or may not like to do).
Quick Note: Ignoring your creditors can have serious consequences and we would recommend you avoid this course of action.
Types Of Debt That Cannot Be Statute Barred
The Limitation Act (1980) doesn’t apply to debts owed to the Crown such as income tax. Due to the nature of the act in that it prevents court action to collect the debt, & with some debts such as Council Tax & benefits overpayment sometimes adopting other methods of collection that don’t involve court action, this may mean the debt can be collected even after six years have passed, it may be the case that these debts cannot be extinguished in the same fashion as other more standard debts. (seek further information either by contacting us or your local citizens’ advice bureau for more information.)
The main thing is that you act and don’t bury your head in the sand, we have experts to help you at any stage, no matter how big or severe your debts.
When do creditors stop chasing the debts?
If the debt has already crossed the six year limitation period this may act as a deterrent for creditors in any pursuit of repayments, if not you are entitled to remind the company in pursuit the debt is now extinguished.
Exceptions to this are any liabilities not covered by the six year time limit (mortgages, court costs, benefit overpayment & council tax debts).
I Have Council Tax Debts Over Six Years Old
For this type of debt – the six year limitation period will not apply as it is not considered a standard personal debt & will not be extinguished after the statute barring period.
What Happens If I’m Not Clear On Any Of The Information On This Page?
Feel free to get in touch on a no obligation basis for help.
More Creditor Related Questions: