Find Out If Your Debt Is Statute-Barred with Letter Template
By
Scott
Scott Nelson
Managing Director
MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.
Could you legally write off some debt? Answer below to get started.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
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For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
Are you wondering how to determine if your debt is statute-barred? Don’t worry; you’re not alone! In fact, over 170,000 people visit our website each month seeking guidance on debt solutions.
In this easy-to-understand guide, we’ll assist you in:
Finding out if your debt is statute-barred
Explaining whether debt collection agencies can pursue statute-barred debts
Providing a letter template to stop debt collection agencies from contacting you
A study by Citizens Advice found evidence of poor practices by debt collectors in the UK, including the collection of very old debt.1 So, we understand your concerns.
Some of us have even been in the same boat. With our experience, we’ll help you navigate through these matters.
Could you legally write off some debt?
There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.
Answer below to get started.
This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.
Is Your Debt Statue Barred?
Unless you have been taken to court, most debts cannot be legally enforced once a certain amount of time has elapsed.
In England and Wales that amount of time is six years.
At that point, the debt becomes statute-barred. In Scotland it’s five years and at that point the debt becomes extinguished.
There are slight differences between a debt that has become statute-barred and a debt that has become extinguished, but to all intents and purposes they are the same thing.
It’s important to note that the six (or five) years start running from the last time that you made a payment or acknowledged the debt in writing.
It isn’t six (or five) years from when the debt arose.
As soon as you make a payment or acknowledge the debt the clock is reset and the time starts running again.
This means that if you took out a loan seven years ago and made repayments for the first three years, that debt would be not statute-barred or extinguished.
You would have acknowledged the debt four years ago, and it would be at that point that the time started running. The debt would still be legally enforceable for another two years in England and Wales, and for another year in Scotland.
How a debt solution could help
Some debt solutions can:
Stop nasty calls from creditors
Freeze interest and charges
Reduce your monthly payments
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
Monthly income
£2,504
Monthly expenses
£2,345
Total debt
£32,049
Monthly debt repayments
Before
£587
After
£158
£429 reduction in monthly payments
If you want to learn what debt solutions are available to you, click the button below to get started.
In fact, some debt collection agencies specialise in buying statute barred or extinguished debts cheaply in the hope that some people won’t realise that their debts are no longer legally enforceable and will pay up.
If you are being chased for a debt that is statute barred or extinguished you are not legally obliged to do anything and there is nothing the debt collection agency can do because the debt is no longer legally enforceable.
If you don’t do anything, though, the debt collection agency will continue to chase you.
As such, it might be in your interest to send the following letter:
Dear Sir/Madam
Re: [Reference]
I refer your letter dated [date] regarding this account.
I believe that the debt to which you refer is [statute barred/extinguished] and as such, I will defend any court claim.
If I do not receive either evidence that the debt is not [statute barred/extinguished] or confirmation that you will not be contacting me further, I shall file a complaint with Trading Standards and the FCA.
That would mean that the six year period (or five year period in Scotland) starts running again. You should only send this letter if you are sure that the debt is statute barred or extinguished.
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MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.
Could you legally write off some debt? Answer below to get started.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.