CCJ’s stick to your record and can seriously reduce your chances of getting credit in the future.īut what happens to really old debt – debt that has been ignored for years and seemingly forgotten?Įven if you are not legally obliged to pay any money once a debt becomes statute barred, you can still get chased for it. If this is asked for, the courts will decide whether or not you are liable to repay the debt, and set out in detail, the manner in which it has to be repaid. If traditional communications fail then it’s possible that your creditor will take a further step of requesting a County Court Judgment (also known as a CCJ). As those who have dealt with them will attest, debt collection agencies tend to be much more ‘thorough’ when finding and collecting debt. If the original creditor cannot get in touch with a debtor it is not uncommon for them to outsource the collection of the debt to someone else. Well the first thing that usually happens if you haven’t been in contact with a company you owe money to, is they’ll pass your debt onto a collection agency. What Happens If You Haven’t Contacted A Creditor? If the debt in question is related to a mortgage, then the time-limit doubles and you require 12 contactless years before any statute barring. It’s also worth noting that if someone takes legal action (such as requesting a CCJ) on you during the six-year window since you last acknowledged the debt, then you are still legally obliged to pay the debt and it will not become statute barred. The downside is, although a company cannot legally make you give them any money, the debt still exists and they can bother you with as many letters, emails, texts or calls as they like until the debt is paid in full. This means that (with the exception of Council Tax bills), the creditor cannot use legal means to enforce you to pay a debt.
The same thing goes with debts according to The Limitation Act 1980, after a period of six years, if the debtor has not acknowledged the debt through payment or contact, it becomes statute barred. After a period of six years after you miss a payment, the default is removed from your credit file and no longer acts negatively against you.
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If a creditor continues to contact you once the debt becomes “statue barred” then you are entitled to report them for harassment, as well as making a complain to the Financial Conduct Authority.įor free debt help and advice simply contact us and one of our friendly advisers will give you all the help you need. The time period between your last contact with the creditor – whether it was a payment made, a letter or a telephone conversation – has been six years, this means that the debt has become “statue barred” and the creditor is no longer allowed to pursue you for payment or take any further legal action against you. You then receive a letter from them to say they want you to resume payments and clear the debt. You take out a credit card, after a period of time you lose contact with your credit card provider and stop payments. To explain it further here is a possible scenario… Once the prescriptive period expires the debt cannot be allowed as a deduction. These debts are completely extinguished and cannot be enforced. (For details of this Act see Gloag and Henderson 12th edition at Chapter 4.). Under Scottish law, if a lender allows time to pass without receiving any payment an action for recovery may become barred under the Prescription and Limitation (Scotland) Act 1973. These instructions do not apply to debts in Scotland.
All creditors have a fixed period of time, as stated in the Limitations Act of 1980, in which that they can pursue a debtor for a debt.
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