Can a Written Off Debt be Reinstated?

Are you worried that a debt you thought was written off could come back? Don’t worry; this article will help you understand what can happen.

We know that the idea of a written-off debt being reinstated can be a big worry. Over 170,000 people come to our website each month for advice on debts just like this, so you’re not alone. We’re here to help you understand the ins and outs of written-off debts.

In this easy-to-understand guide, we’ll explain:

• What to do if you’re worried about your debt.
• How many years after a debt is written off.
• If a debt collector can restart the clock on your old debt.

We understand how tricky debt can be, as some of our team members have had their own struggles with debt. We know how it feels, and we’re here to help you through it. Let’s find out more about written-off debts.

Is it possible?

A debt that has been written off because it became statute barred cannot be reinstated.

The Financial Conduct Authority (FCA) prevents creditors from contacting you to make a payment on a statute barred debt.

If they persistently ask you to pay a written off debt, you can complain about the company to the FCA. 

Should I pay it?

You are not legally obliged to pay a debt that has been written off because it become too old to be enforced.

However, some people may choose to pay off the debt if they have the means to do so and do not want the debt to affect future credit records. 

Paying off the debt will improve your credit score and could help get approved for future credit or credit at better rates, including any future mortgage applications.

You may want to consider this before deciding not to pay. 

How long does it take to be canceled?

Your creditor should take action to recover the debt within six years, or five years if you live in Scotland. This is known as the limitation period.

A longer limitation period applies for mortgage debts (12 years).

If, during the limitation period, certain conditions are met, the debt becomes ‘statute barred’, which means it can no longer be legally enforced and you do not need to pay. 

For a debt to become statute barred, you must not have:

1. Made any payments towards the debt. In the case of joint debt, both parties must not have made a payment during the limitation period.
2. Acknowledged the debt as yours in writing. 
3. Been taken to court by the creditor to pay the debt. If you have been issued with a CCJ to pay the debt, the limitation period no longer applies.

Statute barred debts was introduced into law as a way to prevent the courts from becoming backlogged with older debt cases, which would stretch resources. 

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Can a debt collector restart the clock on my old debt?

A debt collector cannot restart the clock on the period of time a creditor has to collect your debt – i.e. the limitation period – but actions you take in response to debt collectors may automatically restart the clock.

The limitation period restarts if you make a payment towards the debt, or if you or anybody representing you acknowledges that you owe the debt in writing. 

For example, you might receive a letter from a debt collector asking you to pay a debt that is four years old.

If you make a partial payment towards the debt after receiving the letter, the limitation period restarts, and it will take a further six years (five years in Scotland) for the debt to potentially become statute barred.

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Some debt solutions have fees and may negatively affect your credit rating. MoneyNerd may receive a fee if you proceed with a debt solution through The Debt Advice Service. MoneyHelper offers free, impartial money guidance and help finding free debt advice.

Can they reopen a closed account?

A debt collector cannot reopen a closed account when the debt has become too old to be collected.

But they can reopen a closed account if it was closed simply because they were not able to receive a payment when requested, as long as it is within the limitation period.