Tackling your debts

If my lenders haven’t contacted me, do I have to repay them?

Posted 30 March 2017

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If a debt is statute barred, it means that it’s too old for a creditor to start any court action against you.

If you’re looking into ways of clearing your debts, you might have heard that you don’t have to pay your debts back after a certain amount of time. This is known as statute barred debt and it can be a bit of a tricky subject. Here’s how it works.

What does statute barred mean?

If a debt is statute barred it means it’s no longer enforceable in court. The debt still exists, but your creditors can’t get a County Court Judgement (CCJ) against you, and so they can no longer enforce the debt by sending bailiffs round, or trying to take money straight from your wages or benefits.

For the majority of unsecured debts in England and Wales, the time window that creditors have to enforce a debt is six years.

If it’s been more than six years since you made a payment or acknowledged the debt, and you haven’t had any contact from your creditors during that time and the creditor hasn’t tried to get a CCJ – then the debt could be statute barred.

With joint debts, the six year time limit starts from the last point that either one of you made a payment. Don’t fall into the trap of assuming an old debt you had with an ex is statute barred – they could have been making payments towards it without your knowledge.

The six years it takes for a debt to drop off your credit history is not the same as the six years it takes for a debt to become statute barred. So just because a debt is not showing on your credit file, it doesn’t necessarily mean that it’s statute barred.

If you get a default or a CCJ, it will stay on your credit history for six years and this may mean that you find it harder or more expensive to borrow or be approved for certain services in the future. Remember that if you do get a CCJ against you, then that debt can never become statute barred.

Can every debt become statute barred?

Not every debt can become statute barred. As we said, a CCJ can never become statute barred – because the lender has already taken court action against you. Tax debts like Income Tax and VAT can also never become statute barred.

What should I do if I think that my debts are statute barred?

If your debts are truly statute barred, then you don’t have to worry about your creditors taking you to court about them. It is possible to make a lower, full and final offer to your creditors if you want to get rid of the debt altogether, but you need to be careful with this. If the debt isn’t statute barred, then writing to them and acknowledging the debt is likely to reset the six year time period again.

If you’ve got debts you’re struggling to repay it’s best to address the issue, rather than waiting and hoping that your creditors don’t contact you.

You can find out more about the debt solutions available by contacting one of our advisors using the options at the top of the page.

by Christine Walsh

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