Owing money to various creditors is never a happy occasion, and it can often feel as if you have little say in the debt collection process. However, the rights of borrowers and those in debt in the UK are upheld by certain acts of law, meaning that there may be circumstances through which you won’t have to pay debt through the channels creditors demand of you. It’s never recommended that you avoid paying money that you owe, however, and while it is worth looking into whether or not the money you owe is protected by legislation, it is always a good idea to still have a plan of action to clear any and all monies you may be owing at any one time. What’s worth remembering, however, is that certain debts have time limits for collection – and you could be saved by the bell if time is up at the creditor’s end. Read on to learn more about statute barred debt.
What is Statute Barred Debt?
Statute barred debt refers to those monies due which have passed a certain time limit as outlined via the Limitation Act of 1980. This law essentially allows creditors and lenders to pursue for debts to be paid usually within six years of an initial request – this can extend to double the time, twelve years, for mortgage arrears – this is known as the ‘limitation period’ – and you may be able to oversee a wiping of the debt you owe should this time period come to pass. However, it is also worth bearing in mind that if you have any CCJs (county court judgments) leveled against you during a limitation period, they can be enforced with immediate effect.
Debts which can be barred under law include those whereby CCJs have not been registered by creditors, and in circumstances where you have not physically acknowledged such debt in writing. You may also be protected by the Limitations Act 1980 if you have failed to pay any monies towards the debt during the limitation period. Therefore, while it can be a genuine route out of rising debt, it is perhaps not a set of circumstances you should be banking on. Instead, it should be seen as an option which you can fall back on should you ever need to.
Are Limitation Protected Debts Written Off?
In short – no. Even if a debt is barred following the expiry of a limitation period and in line with all the factors as listed above, it will still remain as debt which you are legally bound to pay. What it means is that the monies owed may become non-enforceable – which results in a series of protections for you, even if it means that the debt remains in force. For one, you’ll have the legal right to defend against your debt, should you have reasons for doing so – and providing the creditors hasn’t pursued you during the limitation period, they will no longer be legally entitled to do so. These can be fairly specific circumstances – but they can protect plenty of people in the bargain.
It is down to the creditor to pursue for monies owing, and they have to request and pursue said monies during the limitation period for statute barring to be avoided altogether. They will not be able to pursue for any debt which is statute barred, by laws as discussed above.
What to Do Next
If you believe that your debt is protected by the laws as discussed above, you will need to discuss the case directly with your creditor. You will need to look closely at factors such as your credit file and any payments you may have made during the limitation period – as it is worth remembering that if you make any payments, the period will simply restart. If it has been six years for standing debt and twelve years for mortgage arrears and you have not been pursued for either during the time periods, you will need to write to advise the creditor of such.
It’s important to remember that any debts which are barred in this way will remain as monies you technically owe – it therefore may be prudent to clear such debts as opposed to following the legislator route – it is entirely your decision – though in any case, it will be worth consulting a financial advisor or expert on which avenue is the best to take before making your final choice. Concerned about statue barring? Get in touch with an expert who can help.