Dealing with debt is never easy and understanding the ins and outs of how it works can feel overwhelming. One term you might have come across while managing unpaid debts is “statute barred debt.” But what does it mean, and how does it affect you if you have unpaid debts? In this blog, we will break down the concept of statute barred debt, how it impacts debts like County Court Judgments (CCJs), and how you can navigate this tricky financial situation.
If you are feeling unsure or concerned about how your debts are being managed, keep reading for everything you need to know about statute barred debt, and why it could be crucial to your financial health.
What Is Statute Barred Debt?
In simple terms, statute barred debt is a debt that is too old to be enforced by a court. In the UK, the Limitation Act 1980 outlines that there is a time limit within which a creditor can take legal action to recover a debt. After this period, the debt becomes “statute barred,” meaning that while it technically still exists, the creditor cannot take legal steps to enforce payment.
The time limit varies depending on the type of debt. For most unsecured debts like credit card debt, personal loans, and catalogue debts, the limit is six years. This means that if you haven’t made any payments or acknowledged the debt in writing during that time, the creditor can no longer legally chase you for it.
When Does a Debt Become Statute Barred?
For a debt to become statute barred, the following conditions need to be met:
- Six years must have passed since you last made a payment or acknowledged the debt in writing. (In Scotland, this period is five years.)
- The creditor has not started court action (like obtaining a County Court Judgment (CCJ)) within this time.
- The debt must not have been secured, such as a mortgage.
If all these conditions apply, your debt is likely statute barred, and the creditor cannot legally force you to pay it.
Does Statute Barred Debt Still Exist?
Even if a debt is statute barred, it’s important to remember that the debt still exists. Just because a creditor can no longer take legal action against you doesn’t mean the debt magically disappears. You are still liable for it, but you are not legally obligated to pay it.
Creditors can still contact you to request payment, but they cannot threaten legal action. If a creditor tries to take court action on a statute barred debt, you can defend yourself by stating that the debt is statute barred.
How to Identify Statute Barred Debt?
If you’re unsure whether a debt is statute barred, there are a few key things you can check:
- When did you last make a payment?
If it has been more than six years since your last payment or acknowledgement of the debt, it may be statute barred. - Has the creditor taken legal action?
If the creditor has already obtained a CCJ or initiated enforcement action through High Court Enforcement Officers (HCEOs), the debt is not statute barred, and you will still be liable for it. - Written acknowledgement |
If you’ve sent any letters or communications acknowledging the debt within the past six years, the statute of limitations may have been reset.
How Does Statute Barred Debt Affect a County Court Judgment (CCJ)?
A key point to remember is that statute barred debt only applies if no legal action has been taken within the six-year period. Once a creditor has obtained a County Court Judgment (CCJ), the statute of limitations no longer applies, and the debt will remain enforceable.
If you’ve already been issued a CCJ, the creditor can take steps to enforce the judgment, including using High Court Enforcement Officers (HCEOs) to recover the debt. These officers have more authority than county court bailiffs and can enforce judgments by seizing assets or recovering payments directly from the debtor.
However, if the debt is older than six years and no legal action has been taken, you may be able to defend yourself in court by stating that the debt is statute barred.
What Should You Do if You Think You Have a Statute Barred Debt?
If you believe a debt is statute barred, there are a few steps you can take:
- Check your records | Go through your financial records to determine when you last made a payment or acknowledged the debt. This is the key piece of information in determining whether the debt is statute barred.
- Request written confirmation | If you’re unsure whether the debt is statute barred, you can write to the creditor asking them to confirm when you last made a payment. Keep copies of all communications.
- Use a statute barred debt letter | You can send the creditor a statute barred debt letter informing them that the debt is no longer enforceable under the Limitation Act 1980. This should stop them from taking further action to collect the debt.
- Seek legal advice | If you’re unsure about your rights, it may be helpful to speak with a solicitor or debt adviser. They can help you navigate the legal process and ensure you’re taking the right steps to protect yourself.
Common Questions About Statute Barred Debt
1. Can a Statute Bbarred Debt be Reactivated?
No, once a debt becomes statute barred, it cannot be reactivated. However, if you make a payment or acknowledge the debt in writing before the debt becomes statute barred, the time limit is reset.
2. What Happens if a Creditor Takes me to Court for a Statute Barred Debt?
If a creditor tries to take legal action for a statute barred debt, you can defend yourself by stating that the debt is statute barred. This defence should prevent the creditor from obtaining a CCJ.
3. Will a Statute Barred Debt Show on my Credit Report?
Once a debt becomes statute barred, it will no longer show on your credit report if it has not already been registered as a CCJ or default. However, debts registered as CCJs can remain on your credit file for six years.
4. Can a Creditor Still Contact me About a Statute Barred Debt?
Yes, creditors can still ask for payment on statute barred debts, but they cannot take legal action. You can request that they stop contacting you by informing them that the debt is statute barred.
If a debt is statute barred, you are not legally required to pay it. However, ignoring the debt could lead to further contact from the creditor. If you are unsure how to proceed, it is a clever idea to seek legal advice.
What to Do if You Have a CCJ for an Old Debt
If a creditor has obtained a CCJ for an old debt, you will need to deal with it in a unique way, as statute barred debt only applies to debts that have not been subject to legal action.
You have several options for dealing with a CCJ:
- Pay the debt in full | This will stop further enforcement action and may remove the CCJ from your credit report.
- Set up a payment plan | You can arrange to pay the debt in instalments, which may prevent further enforcement action.
- Challenge the CCJ | If you believe the debt is statute barred or that you do not owe it, you can apply to have the CCJ set aside.
For further help with CCJ enforcement or managing old debts, it’s important to seek expert advice.
If you’re struggling with statute barred debt or facing enforcement action for a CCJ, Shergroup is here to help. Our team of experts, including experienced High Court Enforcement Officers (HCEOs), can guide you through the process and provide support to ensure your rights are protected.
Contact us today at www.shergroup.com to learn more about our enforcement services and how we can assist you in managing your debts.
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