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Scotland Statute Barred Debt Rules (with Letter Template)

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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.

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Janine
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Janine Marsh

Financial Expert

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.

Learn more about Janine
· Feb 6th, 2024
Could you legally write off some debt? Answer below to get started.

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scotland statute barred debt

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 worried about a letter from a debt collector? You might be asking, “Where did this debt come from? Should I pay it? Can I afford to pay it?” It’s okay. You’ve come to the right place to find answers.

Each month, more than 170,000 people visit us for help with debt problems. You’re not alone.

In this article, we’ll help you understand:

  •  The rules about old debt in Scotland.
  •  If old debt can be wiped out.
  •  How a law called a statute of limitation can help.
  •  How to use a letter template to deal with your debt.

We understand your worry. Some of us have been where you are now, feeling afraid because of a debt letter. But don’t worry; we’re here to help you figure out your options.

So, take a deep breath, and let’s learn more about ‘Scotland Statute Barred Debt Rules’.

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.

How much debt do you have?

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.

Does Scotland have a statute of limitations?

Yes, but it’s not formally known as a limitation period. In Scotland, the period of time is known as the prescriptive period or even sometimes the time bar. 

Which Act in Scotland concerns statute-barred debt?

The Prescription and Limitations (Scotland) Act 1973 outlines the laws regarding debts that become too old to be collected, otherwise known as statute-barred debt or prescribed debt. 

How long before a debt becomes statute barred?

The length of time before a debt becomes statute barred depends on the:

  1. The type of debt
  2. Where you live

Some debts take longer than others to become statute-barred than others. And the rules are slightly different if you live in Scotland. In fact, Scottish debtors usually have a better deal. 

Generally, the time limit for debt collection in Scotland is 5 years. I recommend speaking to a debt charity as soon as possible as they will be able to explain when your debts will become statute-barred in detail.

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. 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.

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Statute barred debt Scotland explained

Most debts that can become statute-barred in Scotland will do so after five years from the “cause of action”. The cause of action is usually the date when the creditor or company can take further action against you to collect arrears. But it might be different!

The debt only becomes statute barred if the required timeframe – typically five years – has passed since the cause of action, and the debtor hasn’t made a payment to the debt or acknowledged the debt in writing during that time. 

If either of these events has occurred, the clock resets before the debt becomes statute barred. Moreover, no debt can ever become statute barred if you’ve already been ordered to pay the debt by a court. 

This is a shorter timeframe than the rest of the UK, which is six years for most qualifying debts. 

» TAKE ACTION NOW: Fill out the short debt form

Is Scotland statute barred debt written off?

Statute-barred debt in Scotland ceases to exist and is, therefore, automatically written off. 

This is an important difference between Scotland’s statute-barred debt and statute-barred debt in the rest of the UK. 

Whereas Scotland’s statute-barred debt no longer exists, statute-barred debt in the rest of the UK becomes legally unenforceable, and the debtor can never be made to pay. But although they never have to pay, the debt isn’t automatically written off. It still exists, and the debtor might need to ask for it to be written off. 

Can I be chased for debt after 10 years in Scotland?

Possibly. There are some debts in Scotland that take much longer than the standard five years to become statute-barred. 

For example, it takes 20 years for council tax arrears to become statute-barred, and the capital on mortgage arrears (not interest added!) takes 12 years. 

There are even debts that can never become statute-barred in Scotland, such as income tax or VAT arrears. 

So, while rare, being chased for long-term unpaid debts isn’t impossible.

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

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I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

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What if a creditor asks you to pay a statute-barred debt (Scotland)?

If a company or creditor asks you to pay a debt that you believe is statute-barred and, therefore, no longer exists, you can make them aware of the situation. 

It’s best to do this in writing by sending the creditor a polite letter letting them know you don’t take liability for the debt. 

It’s so important that you word this letter carefully. 

You don’t want to send a letter that somehow acknowledges you owe the debt and find out that the debt wasn’t yet too old to be collected. This would restart the clock. 

You can use my free letter template if you need some guidance.

Statute barred debt Scotland letter template

MoneyNerd has made it easier to tell Scottish creditors that the debt they’re trying to collect no longer exists. 

Download our free statute-barred debt Scotland letter template.

All you need to do is insert some personal details and send it off. It’s best to keep a copy and proof of posting. 

Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

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.

The authors
Scott Nelson Profile Picture
Author
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 Profile Picture
Debt Expert
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.
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