If you have a debt that has become statute-barred and you’re still being contacted by your creditors for it, you can tell them to stop contacting you.
You will do this by sending them a letter detailing the fact that the debt has now become unenforceable.
Today, I’ll be discussing what facts you should include in your letter to your creditors and how you can effectively get them to stop contacting you.
How can I get a Creditor to Stop Contacting Me Regarding a Debt that has become Unenforceable?
If you’re absolutely sure that a debt is statute-barred and your creditor is still contacting you for it, this goes against Financial Conduct Authority Guidelines. Thus, you should inform your creditor of this in order to get them to stop.
Before you contact your creditor and tell them to stop contacting you regarding the debt, you have to be completely sure that the debt has indeed become statutorily-barred.
For a simple contract debt such as a personal loan or credit cards, a debt becomes unenforceable after six years. Keep in mind that this is only if all conditions are fulfilled for six years and the limitation period does not reset.
These conditions are:
- The creditor has not taken out a County Court Judgment (CCJ) against you.
- You (or your joint debtor in the case of a joint debt) has not made any payment to your creditor in the past six years.
- You (or your joint debtor in the case of a joint debt) has not made any acknowledgement of the debt in the past six years.
If all these conditions have been fulfilled, then your debt is definitely statute-barred and, assuming that your creditor is regulated by the FCA, they do not have the right to be contacting you about it.
In your letter you should detail all of these conditions as they are stated in the Limitation Act 1980.
Furthermore, you should ask them to provide proof that the debt isn’t unenforceable. Always remember that they’re the ones that have to prove that the debt isn’t statute-barred. You don’t have to prove that it is statute-barred.
If they are unable to provide proof that the debt isn’t statute-barred, then they should admit to you in writing that they will not pursue you in the future for the unenforceable debt.
Important Things to Include
It’s extremely important that you include in your letter that you don’t admit liability for the debt and you don’t intend to make any payments towards it.
Make sure to never say things such as you’re not sure if the debt is enforceable or if you think that the amount your creditors have quoted is wrong.
Be sure to include the Limitation Act 1980’s Section 5 which states that:
“An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
You can also include excerpts from the FCA’s Consumer Credit sourcebook which states that:
“…a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period.”
In addition to this, you can also include the following:
“A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred.”
What are Some Things to be Aware of Before Sending My Letter?
As I mentioned earlier, the first thing you should make sure of is that the limitation period is over and the debt is statute-barred.
Once you’re sure of that, you must ensure that your creditor is regulated under the FCA.
If they are not regulated by the FCA, then they still have the right to contact you for your debt regardless of the fact that it has become unenforceable.
They can’t take you to court for it but they can still contact you and attempt to recover their debt from you outside of court.
Thus, you must make sure that your creditor is indeed regulated by the FCA.
There are also some creditors and types of debt for which this would not work, for example, Council Tax debt or Tax Credit overpayments.
Creditors such as HM Revenue and Customs can take money straight from your wages and benefits without ever needing to even go to court. Thus, sending such a letter to them would not work.
How Much Time Should I Give My Creditors to Provide Proof that the Debt isn’t Statute-Barred?
You should give your creditors 21 days to come up with proof that the limitation period isn’t over yet.
This could either be a payment receipt from you within the last six years or a written acknowledgement of the debt within the last six years.
If they are able to come up with proof, then you will have to pay the debt.
However, if they’re not able to come up with proof, then you should ask them to send a written acknowledgement which states that they won’t be contacting you about this matter in the future.
Make Sure to Keep a Copy of the Letter
This goes without saying but I’ll still say it: Definitely keep a copy of the letter that you’re going to send to your creditors in case you need it for proof in the future.
If your creditor doesn’t agree with you, he might try to pursue court action against you. In the case of court action, you’re going to want to have proof for every situation.
It’s also a good idea to use a postal service which notifies you when the recipient receives the letter so that you have proof that your creditor did indeed receive your letter about the statute-barred debt.
It can be confusing to write a letter to a creditor about a debt that is unenforceable and you may be worried about omitting some necessary things.
That’s why it’s very important that you do your research and be aware of what the rules are before you send anything over to your creditor(s).