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Statute Barred Debt

Statute barred debt, Time barred debt, Old debt, Out of date debtIf you have a debt which you have stopped paying and have made no acknowledgement of after 6 years the chances are that is has become statute barred (also known as time barred) and you will no longer have to pay it (Note the rules in Scotland are different).

After a debt has become statute barred the creditor can no longer take further legal action against you to collect the money they are owed. This means they can no longer apply to the court for a CCJ (County Court Judgement) against you, a charging order against your property or petition for your bankruptcy.

In affect they have to cease all collection activities against you and if they do then try to collect the debt this would be deemed as harassment under Section 40(1) of the Administration of Justice Act 1970.

When does a debt become statute barred?

If you live in England, Wales or Northern Ireland most unsecured debts including Council tax and HMRC debts become statute barred if you have made no payments towards them or acknowledged them for the past 6 years. There are some exceptions to this however such as mortgage debts which do not become statute barred for 12 years. A creditor is not allowed to continue to try and collect a debt from you which is statute barred and if they do so this is normally seen as harassment. If you are being chased for a debt which you believe is statute barred the best way to communicate with the creditor is by letter. Further details are available here.

Can a creditor stop a debt becoming statute barred?

Generally speaking if you are not paying your debt the only way that a creditor can prevent it from become statute barred is to issue a CCJ (County Court Judgement) against you. This does not mean that the debt is permanently prevented from becoming statute barred but the time until it does is extended for a further 6 years. It is possible to try and hide from your creditors until your debts become statute barred however this may not stop them issuing a CCJ against you. More information about this is available here.

Statute Barred Debt in Scotland

The rules for Statute Barred debt in Scotland are different. Unlike in England & Wales most unsecured debt in Scotland becomes statute barred after 5 years. However there are more exclusions than in England and Wales. More information is available here.