How Long can Debt Collectors Try to Collect UK? – Loopholes, FAQs with Guide & More

Here’s a question I often get when dealing with people who are in debt:

“Is it possible for my debt to be written off if my creditors haven’t contacted me in a long time?”

The answer is yes. It can definitely be written off if your creditor or creditors fail to contact you for a long time.

“A long time” is very vague though. What do I exactly mean by that phrase? Well, the short answer is six years. If you’d like a more detailed answer, read on. 

What is a Statute-Barred Debt and What Does it Mean for Me? 

A Statute-Barred debt refers to a debt that has now become unenforceable because the time that is given to a creditor to chase their payment has passed. 

Keep in mind that this does not mean that you can ignore your creditors and/or debt collectors for six years and expect your debts to be magically written off.

The ‘limitation period’ starts from the last time you were in contact with your creditors. This can mean anything from when you last made a  payment towards your debt or the acknowledgement of your debt. Thus, if your creditor is contacting you, ignoring them will not “start” your limitation period. The limitation period only counts when your creditor is not making any attempt to get their payment from you. 

The complete outline of how Statute-barred debts work is given in the Limitation Act 1980. Please keep in mind not to consider this act an easy way to write off your debts. This act can only be used to write off your debt if it is statute-barred. If your debt is legitimate and enforceable then there’s no way you can use the act to get it written off.

The act is in place to protect debtors from debt collection agencies which attempt to pursue non-enforceable debts. If a debt collection agency keeps hounding you about a non-enforceable debt, you can report them to the Financial Conduct Authority (FCA) in the UK. 

Can My Creditor Chase My Debt Forever?

According to the Limitations Act 1980, a creditor has six years to pursue their debt from you (or twelve years for certain mortgage shortfalls). I must reiterate that for these six years to count, you must not have submitted a payment or made an acknowledgement of your debt to your creditor even once. The limitation period does NOT count in the time during which you have been making payments to your creditor. 

You must also note that if your creditor registers a County Court Judgement (CCJ) against you then your debt cannot become a Statute-barred debt, i.e., it can be enforced at any point in time. 

You must also keep in mind that the Limitations Act 1980 does not cover all types of debts. For example, debts that you owe to the Crown such as income tax are always enforceable. The Limitations Act 1980 prevents court action from being taken against the debtors. Hence, a lot of debts such as Benefits Overpayments and Council Tax debt use other methods of collecting the debt that don’t involve court action. Hence, these debts may be able to be collected even if the debt had occurred more than six years ago. 

how long can debt collectors try to collect UK

How Do I Know If My Debt is Statute-Barred? 

Here’s a quick checklist for you to figure out whether or not your debt is statute-barred: 

  • You do not have a County Court Judgement (CCJ) registered against you by the creditor. 
  • You have not made a payment to your creditor or any debt collection agency that they may have hired in over six years. Please note that in the case of a different type of debt such as a joint debt, neither you nor your partner must have made a payment in the last six years. 
  • You (or your partner in the case of a joint debt) have not acknowledged the debt in writing in over six years. 

If you meet ALL of these conditions, then that means that the limitation period has passed and your debt is statute-barred. 

Does a Debt Being Statute-Barred Mean That It’s Written Off? 

The short answer is no. It’s very important for you to understand that a debt being statute-barred does not mean that it has been written off. 

A debt being statute-barred means that if, for example, your creditor sues you in a court of law, you will be able to defend yourself effectively and you will not get a CCJ. It also means that your creditor(s) will not be able to hound you for payments if they have not been in contact with you for six years. If a creditor persistently keeps trying to contact you AFTER your debt has become unenforceable, YOU can sue them in a court of law or report them to the Financial Conduct Authority. 

You may be asking yourself “If I don’t have to pay the debt, isn’t that the same as the debt being written off?” Well, not exactly. The debt will still exist in your credit file and will continue to impact it negatively. Not to mention that for certain types of debt, even if your debt is statute-barred, your creditor can still legally attempt to ask you to pay up using other actions that don’t involve a court order or judgement. 

What Should I Do If I Know My Debt is Statute-Barred? 

If your debt has become statute-barred, then that means your creditor has not contacted you in over six years. Chances are that if they have not contacted you in six years, then they will not contact you in the future. If this is the case, then you’re lucky. You have to do literally nothing at all.

However, if that’s not the case and you have a creditor that has started contacting you after six years regarding your debt, then here’s what you can do:

  • Get a copy of your credit file. 
  • Write a letter to the creditor that is contacting you and inform them that the debt they are trying to pursue has become unenforceable. Be sure to use a service that confirms when your letter has been delivered so that you have proof that your creditor did indeed receive your letter. 
  • Keep in mind that you are the one in control. There is no need to panic if you know for a fact that the debt has become statute-barred. Proving that your debt is statute-barred is NOT your burden to bear. In fact, the ball is in your creditor’s court. They are the ones who need to prove that your debt is, in fact, NOT statute-barred. 
  • After you’ve sent a letter to your creditor explaining that the debt has become unenforceable, if they keep trying to contact you without sending proof, then you can complain to the Financial Ombudsman. Please note that you should not complain to the Financial Ombudsman before you have informed your creditor that the debt has become statute-barred and asked them for proof that it hasn’t. If you go to the Financial Ombudsman first, then they will simply bounce back your complaint. 
  • If your creditor does send proof that the debt is not statute-barred, then you’ll have to start making arrangements to start paying off your debt. Please bear in mind that this is not the end of the world. You have lots of affordable options to pay off your debt such as through an Individual Voluntary Arrangement (IVA), a Debt Management Plan (DMP) or a Debt Relief Order (DRO). I recommend contacting an independent charity such as Citizens Advice or StepChange. They will help you analyse your situation and develop a payment plan for your creditors and they will do this free of charge. Always remember to never feel pressured to paying your creditors even a penny more than you can afford.  

Is There Anything My Creditors Can Do Once My Debt has Become Unenforceable? 

As we mentioned earlier, after a period of six years, your debt becomes statute-barred but it is not necessarily “written off”. This means that there are certain cases in which your creditors can still pursue you and ask you to make payments towards your debt. 

A debt being statute-barred protects you from your creditors in a court of law. Your creditors cannot get a money judgement or a CCJ against you and they also do not hold the power to make you bankrupt. However, as the debt still technically exists, your creditors can still contact you and ask you for payment if they are not regulated by the FCA.

There are examples of certain types of debt that do not require court action for them to take money from you even if your debt is statute-barred. This applies to certain cases such as the Department of Work and Pensions (DWP), local authority benefit overpayments and HMRC tax credit overpayments. The reason for this is that these creditors can easily deduct money from your wages to take care of your debts owed to them without ever having to go to court. 

Conclusion 

In the end, all I have to say is that a lot of the times when you’re contacted by debt collection agencies, it’s regarding a debt that isn’t even enforceable anymore. Thus, in all cases, knowledge is power. If you’ve done your research and are well-informed regarding how far in the future debts can be enforced, it will save you a lot of time and a lot of stress as well.

References

CONC 7.3 Treatment of customers in default or arrears (including repossessions): lenders, owners and debt collectors

CONC 7.9 Contact with customers


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