Last Updated: Sunday 17th March, 2013
The sands of time runs out for everything, including debts. Read how you can stop creditors from chasing you if your debt is old enough.
Statute Barred Debt - Scotland
In Scotland the law relating to the time period that a debt can no longer be pursued in the courts is different from the rest of the UK. Here is a brief guide on how you use the law to deal with creditors chasing you for old debts.
What is a statute barred debt?
Statute barred debts are debts which cannot be legally enforced. The Prescription and Limitation (Scotland) Act 1973, Section 6 limits the timescale which a creditor can take legal action to recover their money to 5 years, provided the following conditions are met:-
- There are no outstanding decrees against you, AND
- No payments have been made towards the debt for the last 5 years, AND
- No written communications with the creditors have taken place acknowledging the debt.
Please note if the debt is in joint names then the above also applies to the joint party.
If these conditions are met then then debt has been extinguished meaning that it no longer exists! So make sure your credit file reflects this.
How to handle debt collectors and creditors
You now believe your debt to be statute barred so what is the next step? How can you stop the debt collectors from ringing you at all hours? How can you stop their letters? This 3 stage action plan should stop them.
- Find out if there are any decrees made against you. To do this you should contact the three credit reference agencies and check your credit file.
- Obtain any information the company has on you through the Data Protection Act 1988 using this template letter. When writing to any finance company about a debt which you suspect is time barred never sign the letter.
- Use this sample letter to write to the creditor stating that under Section 6 of the Prescription and Limitation (Scotland) Act 1973 applies to the debt and it is now time barred.
Note: If the above has not worked and you are still receiving calls from debt collectors or finance companies looking for money then contact your local council's trading standards department and they'll help.
Keep copies of all letters and send them by recorded delivery.
Why do I say that you should never sign any letters? Well, some people think that there are a few unscrupulous finance and debt collection companies that have in the past used the signature attached to letters to forged letters from debtors acknowledging the debt! I don't have any proof of this but I am just let you know so you can make up your own mind.
When writing to any debt collection company, make sure you head the letter up, "I do not acknowledge any debt to you or any other company or organisation that you claim to be representing."