In the UK, the statute of limitations is a legal term that refers to the time period within which a creditor must take legal action to recover a debt. Once the statute of limitations has expired, the creditor can no longer take legal action to recover the debt. The length of the statute of limitations varies depending on the type of debt and the circumstances under which it was incurred. For example, the statute of limitations for unsecured debts such as credit card debt or personal loans is typically six years, while the statute of limitations for mortgage debt is typically 12 years. Additionally, the limitation period for bringing a claim for a breach of contract is six years from the date of the breach, and for tort is six years from the date of the wrong.
Statute of Limitations
If anyone has recently received contact from debt collection agencies about dormant debts from the dim and distant past then check out the link below for the law regarding debts that are more than six years old.
from this it can be derived that if you’ve received a letter from a company regarding old debts IGNORE IT, DO NOT CONTACT THEM and especially DO NOT ACKNOWLEDGE THE DEBT as this will start the time limits all over again
This is unless of course you are happy to repay the debt then disregard what has been written here.
Also please be aware of people or organisations that could take opportunities like this to run scams playing on peoples ignorance of the law and memory to relieve you of your hard earned. Just to simplify the link above.
When Do Debts Expire?
The way the statute of limitations comes into play at different times regarding different debts, for any land related debts such as mortgage shortfalls the creditor has 12 years from when default has occurred to take the matter formally through the courts.
Unsecured Debts Expire
For unsecured credit cards and loans the period is 6 years from default to take the borrower to court. If the relevant period is reached without court action being taken then they lose the right to do so forever. If a summons is issued prior to the six year term it’s a standard defence as it’s already a statute barred debt no court action or order can be taken or made.
They can chase a debtor for the money and they would still owe it. The debt would still exist, they would still be liable, they can still be asked to repay it and it can still be re-registered on their credit file time and time again if it remains unpaid, the only change is the person cannot be forced to repay it any longer.
Ultimately if someone wishes to borrow again in the future then an old debt registered on a credit file could present a challenge. If this is so my suggestion would then be to make an offer of a full and final settlement. This is of course only if it does adversely affect your credit rating.
If the creditor has been to court and there is a County Court Judgement outstanding, then the debtor cannot use the statute of limitations to dispute they owe the debt. It does not matter how many years ago the creditor went to court, the CCJ will still exist. However, the creditor may not be able to enforce the Judgement without the court’s permission if the Judgement is over six years old.
If the debtor thinks the creditor has been to court and obtained a County Court Judgement against them after the debt is out of the six year limitation period, then they can ask the court to “set aside” or remove the County Court Judgement so you can put in a Limitation Act defence.
For people who aren’t confident doing this on their own the best option would be to seek professional assistance.