How Long Can You Chase a Debt? – Statute Barred Debt
4th February 2020
How Long Can You Chase a Debt? – Contents
- How Long Can a Debt Be Chased in the UK?
- The Meaning of Statute Barred Debts
- Is My Debt Valid for Recovery? – 3 Helpful Answers
- Instruct a Debt Recovery Agency – DCBL
How long can you chase a debt? What are the time limitations on recovering money? Have I left it too late to try and get the debtor to pay? What does Statute Barred mean?
These are all valid questions to ask when someone owes you or your business money, especially with the stress this can cause.
Many people do not realise that there is a time limitation on how long you can chase a debt. This could end up with them being unable to recover it, which is the last thing anyone who is in a position wants to experience.
In reality, creditors usually take action quickly to ensure that those who owe the debt pay up.
Knowing the time limit for chasing a debt can be challenging and asking for debt advice is completely natural.
DCBL has put together this helpful guide to assist with the time scales related to recovering debt.
How Long Can a Debt Be Chased in the UK?
In the UK, the time frame in which you can take action and chase a debt stands at six years. However, it is not so straightforward to think that if six years have passed that the debt is unrecoverable.
If the debt originated over six years ago without any acknowledgement of debt, then you cannot legally enforce it.
This changes, however, if there is an acknowledgement of the debt and the six-year time frame resets.
If someone owes you money and the debtor has not done anything to pay the debt in what feels like forever, there is still hope.
It is worth remembering that any debts that are active for under six years can still be recognised and valid for enforcement.
The Meaning of Statute Barred Debts
The Limitations Act 1980 lays out information on how long a creditor has to recover debt from a debtor.
After the six-year limitations period and no acknowledgement occurs, the debt is no longer able to be recovered.
When this happens, the debt in question becomes what is known as Statute Barred.
The creditor will have run out of time to use particular debt recovery methods if this happens to the debt.
Is My Debt Valid for Recovery? – 3 Helpful Answers
Taking into account the rules relating to the amount of time a debt can be recovered successfully, you may be wondering whether yours has passed the time.
It is better to get in contact with us if you are having doubts about the longevity of your debt.
Here are 3 helpful tips if you are wondering how long can you chase a debt.
1. How Long Has the Debt Has Been Outstanding
If the outstanding debt has been active for less than six years, you can try and reclaim the money that the debtor rightfully owes.
Any acknowledgement of the debt below the six-year time limit will reset this, leaving you with more time to attempt the recovery.
Should you find out that your debt is nearing the six-year period, it is important not to panic just yet.
2. Has the Outstanding Debt Been Acknowledged by the Debtor?
If you are working for a large firm that has regular unpaid invoices, it may take you a while to acknowledge the debt from your end.
Whilst most up-to-date accounts systems will let you know if invoice dates go unpaid, some may slip through the neck.
At this point, the debtor may not even know that the debt is active and therefore will not acknowledge it.
If the debtor has acknowledged the debt, then the time frame of six years will reset. This can be anything from an email or text to a letter.
If they have not acknowledged the debt, and you are still within six years, you can try reclaim the money.
3. What Is the Financial Situation of the Debtor?
At the time of the debt, the individual or business may have been struggling with financial issues. Understandably, this could result in them not being able to pay the debt that is due.
With the increasing cost of living, this is not the most unusual situation to be in and may be more common than you think.
Fast forward a few years, and the debtor may now be in a better position where they can start to make payments.
Debt can be written off by a company if the debtor has no capability of paying, but this can change.
By using a debt collection agency like DCBL, traces can be carried out to see the debtor’s credit history, financial details and current address.
This will give you a good idea of whether the debtor is being truthful about not being able to pay the money back.
Instruct a Debt Recovery Agency – DCBL
If you find out that the debt is within the limit, we recommend you contact the professionals. Knowing how long can you chase a debt will assist with recovering the money quickly.
By using an expert, established debt recovery agency such as DCBL to manage your debts, you can dramatically increase the rate of collection.
We have over 20 years of experience within the industry, providing clients with a definitive solution for recovering unpaid debts.
Throughout our long history, we have encountered many different types of debts and including those on the verge of becoming Statute Barred.
Our enforcement services are professional and ethical, taking into account the reputation of your business in order to preserve client relationships.
Contact us today online or call us on 0203 298 0201 for a free consultation.