Statute barred debts, should my debts be written off?

When you owe money to a creditor (someone you owe money to) and they take too long to recover their funds from you the debt becomes time barred or ‘statute barred’. This means the debt can no longer be recovered through court action and this would mean legally the debt is written off.

Ignoring debts is never advised as they can tend to snowball and make matters worse and always present the unknown of what will happen next. However if the creditor has been ignored, you have not contacted them or admitted to the debt and not made any payments then the debt will become unforce able, this happens six years from the date of default in England, Wales and Northern Ireland and five years in Scotland.

In Scotland this will apply to most debts but not all that can be included in a Scottish Trust Deed, for example Mortgage Shortfalls which is the debt left over after selling or losing your property and that can take up to twenty years but the interest can only be collected for five years. Council Tax arrears can also be collected as far back as twenty years as well as any benefit overpayment from Department for Work & Pensions (DWP).

Debts from HM Revenue & Customs (HMRC) go back even further – income tax, VAT and capital gains tax does not have a time limit.

If a creditor starts the court action prior to these time period this would be accepted to enforce.

Ok so how do I check which debts should be written off as ‘statute barred’?

Best place to start is write down a list of who you owe money, the amount you owe them and when this date was from. Once completed check any HMRC, DWP or local council debts and check they are not over twenty years old (this would be unlikely is they would normally collect the funds before that time limit) then check your credit report, there are various free reports out there but Checkmyfile checks all four credit reporting agencies and you can get a free trial for thirty days (just remember to cancel after you got your report). Once you have your credit report you are then looking for the ‘default date’ on each debt, if this is over five years ago (six years ago in England, Wales & Northern Ireland) then the debt could then be time barred.

Once you have checked this you must write to the creditor and explain that the debt is ‘statute barred’ and to remove your details, unless they have done this automatically.

Need help with a letter to send to the creditors or want help finding out if they could be time barred or not? Worried about the ones unlikely to be ‘statute barred’ such as Council Tax, HMRC or DWP?