How Long Does a Debt Last in the UK? Rules for Write Off
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If you’re struggling with debt, you may be wondering how long it’ll take for your debt to expire or how long it will last.
This is a very common question that thousands of debtors have in the UK. In this guide, I’ll be shedding light on the question along with an FAQ section for further clarity.
Let’s get right into it.
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How Long Before a Debt is Written Off in the UK?
In this section, I’ll be talking about how long it takes before debts are written off in the UK. By “written off”, I mean that you won’t be liable for paying your creditors the debt anymore and they won’t be legally entitled to receiving more payments from you either. Interestingly, there are times when your debt is not “written off” but that you no longer have to pay it and your creditors can no longer chase it, which we’ll also cover later in the article.
How long before debt is written off?
Most types of debts in the UK are written off after 6 years from the point when they are initiated, providing certain criteria is met. This means that your debt to your creditor is active for a period of 6 years from either the point of initiation, or if it has been 6 years since you last made a payment to your creditor/creditors.
Of course, if you’re delaying payments to your creditor on purpose, your creditor can take court action against you for not paying your debt. This period of six years applies to most types of debts, including credit debts, personal loans, and other loans.
Things work a bit differently when it comes to mortgage loans. For this type of debt, you have a total period of twelve years until it expires from the point of either initiation or the point where you last made contact (or made a payment) to your creditor. However, when it comes to interest on the mortgage, you have a 6 year period until it is written off. If it has been six years since the debt was officially initiated or six years since you’ve made any contact with your creditor, your debt will be written off.
If it hasn’t been a lot of time to your debt and if it hasn’t expired, do be aware that you can be chased by a debt collection agency and debt collectors.
Statute barred debt: A step-by-step guide
This is a term you may have heard when addressing your debts. When does your debt become statute barred? This is the question I’ll be answering in this section.
Moreover, I’ll also give you some debt advice on what it means for the debt you have to pay.
Let’s get right into it.
When a creditor takes way too long in taking action to recover a debt from you, your debt may be classified as “statute barred” under UK law. This essentially means that your creditor cannot recover it from you via court action. When your debt is statute barred, it still exists. The unique thing however is that your creditor can’t take legal action to recover it from you.
In technical terms, this essentially means that it has been written off. However, unlike when a debt is written off under normal means and circumstances, a statute-barred debt still exists. So it is written off, since you don’t have to pay it back, but it still exists and it may matter to potential lenders who look at your credit file and your borrowing history.
If you’re a debtor registered in England, you may want to learn more about the Limitation Act 1980 and how it affects your file, your payment, and when your debt becomes statute barred. As per the Limitation Act 1980, a creditor can chase a debt for a period of six years if the debt is unsecured. If the debt is a mortgage debt, then the period is twelve years in most cases.
This period is called the limitation period for a debt. It starts from either the time of the initiation of the debt or from the point when you made your last payment to the creditor you owe money to. The law says that if the limitation period is exceeded, your debt will be written off automatically. All in all, the law does offer certain protections for people in debt.
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Wrapping it Up
This article covered the fundamentals of how long a debt lasts in the UK. I addressed some key pointers, such as the Limitation Act 1980, your credit file when your debt is statute barred, how long a creditor can chase you for your debt, and more.
I hope this piece helped you understand more about your debt issues. If you need more help, feel free to take a look at my website.