You are responsible for the money you owe other people along with any other charges like water and council tax that are anchored in the law. Most of the debts have a period of about five years except for a few like the mortgage that may run up to 12 years.
Debts of over 6 Years
If you have a debt and have not made any contact with the creditor or made a payment for the last six years, you might not be liable to pay the debt. If you are liable for a debt, the creditor will take action against you that includes taking you to court to compel you to pay the loan amount. If the creditor has already obtained a court order for you to pay the debt, he can enforce the order at any time. However, if the order was made more than six years ago, the creditor is required to go back to court to ask for permission to hire bailiffs.
What Benefits Do You Get Under the Stature?
A stature-barred loan has already passed the period within which the creditor can enforce the loan. This does not mean that the debt has ceased to exist. However, you cannot be taken to court to recover the loan. The creditor may still contact you and ask about the plans to pay the loan. In addition, your file may still be available with the credit reference bureau, which can make it hard for you to get additional credit.
Checklist to Know if a loan is statute barred
- You or a partner in case of a joint debt has not made any payment for the last six years
- You or someone else acting on your behalf, has not written to the creditor about the debt
- The creditor has not taken you to court over the debt
Things to Keep in Mind about Time Limits
If you think that your loan is time-barred, check the last time you paid the loan. Avoid contacting your creditor using an email, SMS or chat-based apps like Whatsapp and WeChat. Writing to your creditor may look like agreeing that you owe them cash. This resets the time limit for another six years before the loan can be statute-barred.
On the other hand, if the loan has not reached the time limit and you make some payment, the time will be reset again from the last payment that you made. It does not matter how little the amount was. If you have a joint debt, the time is reset for both of you if the other person does all the actions discussed above.
What if the Creditor is Still Contacting You for a Statute-barred Debt?
If the creditor is still contacting you for statute-barred loans, you may write to them to stop them from contacting you. However, you must include a statement that says that you do not admit liability for the claim they are making. Avoid saying that the amount said is wrong, or you are not sure whether the amount is right.