Dealing with debt collectors can be stressful, and it’s important to know your rights and what to expect. One common question people have is, ‘How long can debt collectors try to collect in UK?’
Knowing the debt collection laws and your rights as a debtor is crucial to managing your debts effectively. How would you do that? Just keep on reading the article. This article will give you a deep understanding of your rights, debt collection laws, and the practices of debt collection agencies.
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How Long Debt Collectors Try To Collect In UK: Understanding Debt Collection Laws
In the UK, debt collection laws and practices are governed by several organisations such as the Financial Conduct Authority (FCA), and the Prudential Regulation Authority (PRA).
Whether you are a creditor or debtor in the UK, understanding the debt collection laws is important to manage your debt situation better.
Source: MoneySavingExpert
As shown in the above forum post, you too may have doubts about how long can a debt collector chase you for the debt. Let’s look into it in detail.
The Limitations Act 1980 outlines the time limit in which a creditor can chase a debtor to settle the debt. The timeline depends on the type of debt. However, creditors have 6 years to chase most debts. Some debts such as the mortgage can extend up to 12 years.
There is an important point to note:
The Limitations Act 1980 is only valid if there was no contact between the creditor and debtor in the given timeline. It also applies to only the residents of England and Wales.
The time limit is calculated when the debtor last admits owning the money or making a payment.
If the debtor continues to make payments or acknowledge the debt, the clock resets.
Overall, most debts become statute-barred after 6 years, which means the debtors cannot take any legal action after that or force you to pay the debt. They may contact you hoping you’ll pay it voluntarily.
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How would you know if your debt is statute-barred and what actions should you take for such debts? Let’s get into an in-depth discussion about statute-barred debts.
What Are Statute-Barred Debts
A statute-barred debt is a debt that is no longer enforceable as the time limit for legal action has passed.
This doesn’t mean the debt is forgiven. The debtor can still call you asking for repayment, but he can’t take any legal action against you. It’s up to you to decide whether to pay or not.
The inability of the debtor to take legal action will provide you with a layer of protection, but if the debtor calls you constantly it can become stressful.
Hence, if you have confirmed that your debt is statute-barred you must write a letter informing the same and resist any pressure to pay. Keep records of all the communication as it can become useful if any disputes arise and you are harassed to pay.
Now let’s get into the most important part. How do you know whether your debt is statute-barred?
There are some conditions for a debt to become statute-barred. I’ll list them below:
- You or anyone else mentioned on the credit agreement haven’t made any payment to the creditor within the last 6 years.
- You have not written to the creditor acknowledging or admitting that you owe the debt within the last 6 years.
- The creditor hasn’t applied for a County Court Judgement (CCJ) against you within the last 6 years.
Think if your debt meets all the above three conditions. If YES, your debt is statute-barred. In case, you are unsure, contact a debt advisor and confirm it.
What to do if your debt is no longer enforceable? What procedures do you need to follow? Keep reading to find out.
If you’ve confirmed your debt is statute-barred, here are some useful tips to protect yourself from debt collection agencies:
- Get a copy of your credit report and confirm the status of your debt.
- Write a letter to your creditor and state they can’t enforce the debt. Include proof of your claim along with the letter.
- Use clear and firm language when writing the letter.
- Use a service that confirms the delivery of your letter, so you can know the creditor has received your letter.
- It’s not your job to prove that your debt is statute-barred, as the court judgement will be in your favour. However, the creditor may try to prove that it’s not statute-barred. So, keep a record of all the communication you have with the creditor.
- Once you send the prove-it letter your job is done. Keep calm and collected while dealing with the creditor to maintain control over the situation.
How Long Debt Collectors Try To Collect In UK And How To Deal With Them?
As I mentioned earlier, debts becoming statute-barred doesn’t mean it’s forgiven. So, the debt collector can still contact you and ask for repayments.
You must know your rights and the limitations of the debt collectors to deal with such a situation. Let’s look into it in detail.
Debt collectors have the right to contact you but within certain limits. Below are some things they can and cannot do:
- Contact you by phone or mail.
- Visit your home, but should conduct themselves respectfully. However, this is rare.
- Threaten to take you to court.
- Sell your debt to a debt collection agency.
- Negotiate debt repayments. If you agree to any repayment plan ensure you get that in writing.
- Call you at unreasonable hours including after 9 pm or before 8 am.
- Enter your home without permission.
- Harass or threaten you with abusive language.
- Take things from your home or threaten to do so.
- Speak to other people about your debt without your permission.
- Contacting you frequently despite asking them not to do so.
Knowing what debt collectors are permitted to do helps you manage interactions without feeling overwhelmed or threatened. If you experience any prohibited behaviour or feel harassed you can report the debt collection agency to the Financial Conduct Authority (FCA).
What if the creditor has filed a County Court Judgement (CCJ) against you? What will happen and how do you overcome it effectively? Let’s find out in the next section.
How Long Debt Collectors Try To Collect In UK With County Court Judgements (CCJs)
If your creditor has filed a CCJ against you and taken you to court previously, the 1980 Limitations Act can’t dispute the debt and they can chase the debt indefinitely. However, if the 6 years is over, the creditor must get permission from the court again to enforce the debt.
In case, you receive a CCJ the debt is legally recognised and the debt collector has more power to collect it. You must not ignore court notices as they can lead to default judgment and serious consequences.
- Respond promptly to court notices to avoid further complications.
- Consult a legal advisor and understand your rights, implications, and future actions.
- Try to negotiate a payment plan with your creditor. Ensure it’s affordable as missing payments can make the situation worse.
But what about debts that don’t involve court action? How long can debt collectors try to collect in UK for these types of debts?
How Long Can Debt Collectors Try to Collect In UK Without Court Action?
Some debts, like those owed to the Department of Work and Pensions (DWP), and local authorities, don’t require court action. This means the creditors can chase you indefinitely and deduct the debts directly from your wages and other benefits.
- Non-court debts have a different set of legal procedures. So, you must understand the debt types, rules, and the legal implications.
- Contact a debt advisor or a debt charity and seek advice on how to manage the situation.
- Always try to negotiate manageable payment terms with the creditor. This can save you from undue financial stress.
What can you do if you’re in a financial crisis and can’t afford to pay the debt?
Debt Solutions
If you can’t afford to pay the debts, you don’t have to stress. There are different types of debt solutions available and you can consider getting one of them.
- Individual Voluntary Arrangement (IVA)
An Individual Voluntary Agreement (IVA) is a formal agreement between you and your creditor to pay all your debts. You agree to make regular monthly payments to an insolvency practitioner who divides it among your creditors.
This is ideal for people who have to pay significant amounts of debt but can commit to making consistent monthly payments.
- Debt Management Plan (DMP)
A Debt Management Plan (DMP) is an informal agreement between you and your creditor to pay all your debts. You can negotiate an affordable monthly payment with your creditor directly or appoint a DMP advisor to do it on your behalf for a small fee.
It’s suitable if you want to pay small monthly payments towards your debt or do the repayments after some months.
- Debt Relief Order (DRO)
A Debt Relief Order (DRO) is another debt solution to deal with your personal debts. You must meet some eligibility criteria to obtain a DRO.
If your application is approved, your debts will be frozen for 12 months and there’s a possibility of it being forgiven after that. DRO is suitable if you have a low income and few assets.
Each of the above debt solutions has benefits and drawbacks depending on your financial situation. You can seek free advice from a debt charity to choose the right option. Below are some debt charities in the UK:
- StepChange
- National Debtline
- Citizens Advice
Conclusion
According to the Limitations Act 1980 in the UK, most debts become statute-barred when there’s no contact between a creditor and debtor for 6 years, but some debts like mortgages may take 12 years to become statute-barred.
When a debt becomes statute-barred you are not liable to pay it. If the creditor takes legal action the court will give the decision in your favour.
This doesn’t mean your debts are forgiven. The creditor may still chase you for payments and there are certain limitations for this. If you feel harassed by the debt collector you can file a complaint.
In case, your creditor has filed a CCJ against you, the 1980 Limitations Act won’t apply to the debt. You must acknowledge the court notice and take the necessary steps to repay the debts. If you can’t afford it, opt for a debt solution. Fill out this online form to get further assistance to pay off your debts.
Key Points
- According to the Limitations Act 1980, most debts become statute-barred if they were not acknowledged for six years. For some debts like mortgages, the time limit is 12 years.
- For a debt to become statute-barred there shouldn’t be any form of communication between the creditor and debtor about the debt for 6 years and there shouldn’t be a CCJ against it.
- Statute-barred debts are not enforceable through legal actions, but your creditor can call you and ask to make payments.
- Debt collectors can contact you but must follow specific rules, such as not calling at unreasonable hours or using harassment tactics. They can negotiate settlements but cannot force entry into your home.
- If a creditor obtains a CCJ, they can pursue the debt indefinitely. Responding promptly and seeking legal advice is crucial if you receive a CCJ.
- Some debts, like those owed to HMRC or local authorities, do not require court action and can be collected directly from wages or benefits.
- Options for managing debt include Individual Voluntary Arrangements (IVAs), Debt Management Plans (DMPs), and Debt Relief Orders (DROs), each with its own set of benefits and drawbacks.
- If harassed by debt collectors, you can report them to the Financial Conduct Authority (FCA) and should document all communications for your protection.
- Seeking professional advice is essential when dealing with debt collectors, especially in cases involving CCJs or statute-barred debts.
FAQs
Most debts can be enforced after six years if there has been any acknowledgement
You can report the debt collection agency to the Financial Conduct Authority if you feel harassed. Keep records of all communication to prove your claim.
It’s better not to ignore the debt collector completely. Send a letter stating the debt is statute-barred. Use a service which confirms the delivery, so you know the debt collector has received it. Also, keep records of the communication.
A CCJ allows creditors to pursue the debt indefinitely. If you receive a CCJ, respond promptly, seek legal advice, and try to negotiate a payment plan to manage the debt.
Yes, certain debts such as those owed to HMRC or local authorities may not follow the six-year rule and can be collected without court action.
