You are responsible for old debts, but there are time limits for your creditors to take court action for debts such as credit cards, personal loans, store cards, catalogues, overdrafts, water, fuel, rent and council tax.
After a long period of time, your creditors or lenders are no longer able to recover the debts through the courts. This is called being ‘statute barred’.
The debts listed above usually become statute barred if during at least the last six years:
- you haven’t made any payment towards the debt
- you haven’t written to the creditor admitting that you owe the money, and
- your creditor hasn’t pursued the debt through the county court.
Mortgage lenders have 12 years to try to recover a mortgage shortfall from you through the courts, and six years to recover interest owing.
Recovery of some debts is not statute barred, for example tax debts, benefits overpayments and social fund loans.
If the debt is statute barred, your creditor cannot obtain a county court judgment (CCJ) for the debt. However, the creditor can still pursue the debt in other ways, such as using a debt collection agency or sending threatening letters.
The ways that your creditor or lender can try to recover the debt have to be fair. Contact the Citizens Advice consumer helpline for further information.