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Statute-Barred Debt

Statute Barred Debt Letter – Free Sample Letter Template

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Scott Nelson

Managing Director

MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.

Learn more about Scott
&
Janine
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Janine Marsh

Financial Expert

Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.

Learn more about Janine
· Mar 7th, 2024
Could you legally write off some debt? Answer below to get started.

Total amount of debt?

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

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Statute Barred Debt Letter Template

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Are you worried about an old debt? Not sure if you should still pay it?

You’ve come to the right place for answers! Each month, over 170,000 people visit this site for advice on debt solutions.

In this article, we’ll help you understand:

  • What it means when a debt is over 10 years old.
  • If you can still be asked to pay this debt.
  • How to act if you are unsure about an old debt.
  • What to do with debts that are not yours.
  • Where to get free and honest advice on debt.

Dealing with old debt can make you feel unsure and worried. After all, a study by Citizens Advice found evidence of poor practices by debt collectors in the UK, including the collection of very old debt.1

Don’t worry, you’re not alone. We’re here to help you understand your choices and make the best decisions.

Could you legally write off some debt?

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

How can I get a Creditor to Stop Contacting Me Regarding a Debt that has become Unenforceable? 

If you’re absolutely sure that a debt is statute-barred and your creditor is still contacting you for it, this goes against Financial Conduct Authority Guidelines.

Thus, you should inform your creditor of this in order to get them to stop. 

Before you contact your creditor and tell them to stop contacting you regarding the debt, you have to be completely sure that the debt has indeed become statutorily-barred.

For a simple contract debt such as a personal loan or credit cards, a debt becomes unenforceable after six years.

Keep in mind that this is only if all conditions are fulfilled for six years and the limitation period does not reset. 

» TAKE ACTION NOW: Fill out the short debt form

These conditions are: 

  • The creditor has not taken out a County Court Judgment (CCJ) against you.
     
  • You (or your joint debtor in the case of a joint debt) has not made any payment to your creditor in the past six years. 
  • You (or your joint debtor in the case of a joint debt) has not made any acknowledgement of the debt in the past six years.

If all these conditions have been fulfilled, then your debt is definitely statute-barred and, assuming that your creditor is regulated by the FCA, they do not have the right to be contacting you about it. 

In your letter you should detail all of these conditions as they are stated in the Limitation Act 1980.

Furthermore, you should ask them to provide proof that the debt isn’t unenforceable.

Always remember that they’re the ones that have to prove that the debt isn’t statute-barred. You don’t have to prove that it is statute-barred. 

If they are unable to provide proof that the debt isn’t statute-barred, then they should admit to you in writing that they will not pursue you in the future for the unenforceable debt

Important Things to Include 

It’s extremely important that you include in your letter that you don’t admit liability for the debt and you don’t intend to make any payments towards it.

Make sure to never say things such as you’re not sure if the debt is enforceable or if you think that the amount your creditors have quoted is wrong. 

Be sure to include the Limitation Act 1980’s Section 5 which states that: 

“An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

You can also include excerpts from the FCA’s Consumer Credit sourcebook which states that:

“…a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period.”

In addition to this, you can also include the following: 

“A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred.”

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Situation

Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

Get started

What are Some Things to be Aware of Before Sending My Letter? 

As I mentioned earlier, the first thing you should make sure of is that the limitation period is over and the debt is statute-barred. 

Once you’re sure of that, you must ensure that your creditor is regulated under the FCA. 

If they are not regulated by the FCA, then they still have the right to contact you for your debt regardless of the fact that it has become unenforceable. 

They can’t take you to court for it but they can still contact you and attempt to recover their debt from you outside of court. Thus, you must make sure that your creditor is indeed regulated by the FCA. 

There are also some creditors and types of debt for which this would not work, for example, Council Tax debt or Tax Credit overpayments.

Creditors such as HM Revenue and Customs can take money straight from your wages and benefits without ever needing to even go to court. Thus, sending such a letter to them would not work. 

How Much Time Should I Give My Creditors to Provide Proof that the Debt isn’t Statute-Barred? 

You should give your creditors 21 days to come up with proof that the limitation period isn’t over yet. 

This could either be a payment receipt from you within the last six years or a written acknowledgement of the debt within the last six years. If they are able to come up with proof, then you will have to pay the debt

However, if they’re not able to come up with proof, then you should ask them to send a written acknowledgment which states that they won’t be contacting you about this matter in the future.

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

Natasha

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

Get started

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Make Sure to Keep a Copy of the Letter 

This goes without saying but I’ll still say it: Definitely keep a copy of the letter that you’re going to send to your creditors in case you need it for proof in the future. 

If your creditor doesn’t agree with you, he might try to pursue court action against you.

In the case of court action, you’re going to want to have proof for every situation. 

It’s also a good idea to use a postal service that notifies you when the recipient receives the letter so that you have proof that your creditor did indeed receive your letter about the statute-barred debt

Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

References

  1. Citizens Advice – The state of debt collection
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The authors
Scott Nelson Profile Picture
Author
MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh Profile Picture
Debt Expert
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.