Debt collection can be stressful and confronting. You may be wondering how long creditors and collectors can legally pursue you for unpaid debts. Here’s what you need to know about the statute of limitations on debt collection in the UK.
What is the statute of limitations on debt?
The statute of limitations sets a time limit on how long creditors and collectors can sue you to recover debts you owe. This time limit varies depending on the type of debt:
- Oral contracts – 6 years
- Written contracts – 6 years
- Promissory notes – 6 years
- Rent arrears – 6 years
- Credit cards – 6 years
- Personal loans – 6 years
- Overdrafts – 6 years
- Mortgages – 12 years in England and Wales, 20 years in Scotland
The clock starts when you miss a payment or default on the debt. Even if the statute of limitations has expired, the creditor still has the right to pursue the debt and you still owe the money. However, they cannot sue you if the time limit has passed.
Can debt collectors contact me after 6 years?
Yes, debt collectors can still contact you about a debt even after the statute of limitations has expired. There are no laws prohibiting collectors from attempting to collect on time-barred debts.
Collectors may send letters or make phone calls requesting payment on old debts. They may even threaten legal action. However, as long as the statute of limitations has passed, they cannot actually sue you.
Will the debt disappear from my credit file after 6 years?
No, the debt will not automatically disappear from your credit file after 6 years. The typical reporting period is 6 years from the date you defaulted:
- Defaulted accounts – 6 years
- County court judgments (CCJs) – 6 years
Even once the debt drops off your credit file, the creditors may still have internal records of the defaulted account. This means it could reappear on your credit file in the future.
Can I be chased for tax debt after 10 years?
There is no time limit for recovering most tax debts in the UK. This includes:
- Income tax
- Capital gains tax
- Inheritance tax
- National insurance contributions
- Student loan repayments
HMRC can pursue these types of tax debts indefinitely. The exception is VAT debt, which normally has a 4 year time limit.
What should I do about old debts?
If collectors contact you about a time-barred debt, don’t ignore them. Here are some tips on how to handle old debts:
- Ask the collector to validate the debt – Make them prove you actually owe it.
- Don’t make a payment – This restarts the statute of limitations.
- Dispute inaccurate information – You can contest errors on your credit file.
- Seek debt advice – Speak to a professional for guidance on managing old debts.
Can I be sued for a very old debt?
In most cases, creditors and collectors cannot sue you if the statute of limitations has expired. However, there are some exceptions:
- You make a payment – This restarts the time limit.
- You admit owing the debt – A signed admission can override the statute of limitations.
- The creditor has a judgment – If they already obtained a CCJ before the time limit expired.
It’s rare for creditors to pursue debts more than 6 years old through the courts. But it’s still possible if you take actions that essentially reset the clock.
Conclusion
In summary, most debts cannot be pursued through the courts once the statute of limitations has passed – usually 6 years in the UK. However, collectors can still contact you seeking payment on old debts. Tax debts and CCJs may also fall outside the 6 year time frame. Get debt advice if you are contacted about a very old debt.