Yes, it can be very disturbing and stressful when a creditor calls you trying to claim a debt that you never thought again. You may be wondering whether creditors can be legally pursue you over such an old account. I don’t think it is very nice to be confronted with a debt from 10 years ago, but it is often better to pay it rather than just keep on turning your back at it. Before we proceed to the debt laws in the UK, let’s look at the steps you should take in case you find yourself in this position.
Is there a time limit for the UK creditors how long they have to go for the recovery of the debts?
It is however important to understand that there is no set time in which, creditors can pursue debts in England, Wales and Northern Ireland. This means that, in theory, a creditor has the right to go after you for your debts as a debtor for as long as they wish. However, most major creditors such as banks and credit card companies normally take to the ‘write off dead’, this is debts that they consider non-effective, which include those that have not been paid or acknowledged for more than 6 years.
Even though it is legal for them to collect even older debts, few of them do not wish to take action. However, it is important to note that at times the debt, which you believed you had paid off, may be purchased by collection agencies from the original creditor. However, even if the original lender is not hassling you for payment, the collector legally has that right. The collection agencies focus at attempting to collect prior unpaid debts and often purchase ‘dead’ debt at a mere pittance compared to its face value and then attempt to recover the debt. However, it can happen that even years pass by after the service or purchase, one is chased to the extent of being forced to pay the full original price of the service or product.
This brings us to the question of why 10 years was chosen in determining whether the company was making profits or losses
When you fail to pay back your debt, it will be listed on your credit report and most likely after 6 years, it will disappear. Normally, as far as the credit reference agencies are concerned, the length of time that the reference has remained on the credit file is an indication of whether the debt is still collectable. Many financial associations do not even count debts older than this as ‘live’ or collectable.
However, significantly, and maybe a bit sneakily, it means that while the debt can be removed from your credit reference file, this does not mean that the debt is legally non-existent or cannot be recovered. Just bear in mind, there is no legal limitation period, so after another 4 years it is no more legally relevant. Any date is absolutely arbitrary – do not listen to any gossips about debts becoming non-violable or non-enforceable after 10 years has elapsed.
Thus, you cannot just take the fact that the debt is rather old, for example, 10 years old, and claim that it must be non-disputable or more easily disputable. Although it is old, a determined creditor could go after you and try to prove that as there are no set limits on collections, you still owe the money.
What should I do if I am being chased by the sheriffs for a 10 year old debt?
Just like with any other debt, it is recommended not to get anxious about it. The best thing you can do to handle the situation is to remain calm and carefully read any documents that have been provided. Take special notice as to whether or not the creditor can accurately recognize you, that the legal evidence proving your responsibilities (like a signed contract, for instance) is provided, as well as copies of statements/paperwork concerning the amount owed and to whom. Do not turn a blind eye to it, as it gets worse and even becomes dangerous.
If you have no knowledge of such a debt or that there are mistakes, you should write a letter of objection and ask for the correction to be done. However, even with old debts, if you signed to be repaying at any given time, then it is in the legal books that you owe that money. If so, try to come to some kind of an agreement regarding the repayment of the debt and try to arrange some form of repayment plan or make an offer to pay something – anything is better than to face a legal suit or threats of a bailiff where such debt has been accumulating for years.
In summary – although there is no restriction on the process of debt collection in the United Kingdom, the majority of creditors, after 6-10 years of non-recovery, removes the debt. However, debts do not have an expiry period and can thus be purchased by collection agencies for recovery. After so long, it is only natural that you may have forgotten about the money you owe, however as long as it can be proven that you borrowed money or were indebted and did not repay, recovery action is still possible. Hence, people can contact the creditor and negotiate how to solve the issue or decide whether they should pay the money after 10 years or not, if an unsettled debt is left unpaid then it will remain unpaid.
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