Can old debts be written off?

Written by Chelsea Potter on 27 April 2016

It isn’t unusual to have debts that have been sitting around for a long time. Sometimes, you missed a payment and have failed to get back up to date, or you may have an unpaid debt because the creditor in question simply hasn’t chased you for it. However, just because you haven’t received any letters or phone calls, doesn’t mean the debt isn’t there. So what happens to these unpaid and ageing arrears?

What Happens?

Well the first thing that usually happens if you haven’t been in contact with a company you owe money to, is they’ll pass your debt onto a collection agency. If the original creditor cannot get in touch with a debtor it is not uncommon for them to outsource the collection of the debt to someone else. As those who have dealt with them will attest, debt collection agencies tend to be much more ‘thorough’ when finding and collecting debt.

If traditional communications fail then it’s possible that your creditor will take a further step of requesting a County Court Judgment (also known as a CCJ). If this is asked for, the courts will decide whether or not you are liable to repay the debt, and set out in detail, the manner in which it has to be repaid. CCJ’s stick to your record and can seriously reduce your chances of getting credit in the future.

But what happens to really old debt – debt that has been ignored for years and seemingly forgotten? 

Can Old Debts be Written Off?

Well, yes and no. After a period of six years after you miss a payment, the default is removed from your credit file and no longer acts negatively against you. The same thing goes with debts; according to The Limitation Act 1980, after a period of six years, if the debtor has not acknowledged the debt through payment or contact, it becomes statute barred. This means that (with the exception of Council Tax bills), the creditor cannot use legal means to enforce you to pay a debt.

The downside is, although a company cannot legally make you give them any money, the debt still exists and they can bother you with as many letters, emails, texts or calls as they like until the debt is paid in full.

It’s also worth noting that if someone takes legal action (such as requesting a CCJ) on you during the six-year window since you last acknowledged the debt, then you are still legally obliged to pay the debt and it will not become statute barred. If the debt in question is related to a mortgage, then the time-limit doubles and you require 12 contactless years before any statute barring.

What to do Next?

Even if you are not legally obliged to pay any money once a debt becomes statute barred, you can still get chased for it. Besides, no one sends you a letter in the post telling you that you don’t have to pay them back anymore. 

If someone contacts you about a debt that you think might be statute barred, then you can respond by asking the creditor to prove that what you owe is legally enforceable. This can be done with a simple letter in which you should ask for proof that the debt isn’t statute barred (quoting the Limitation Act 1980), and state that you do not acknowledge the debt.

If you receive proof that you have acknowledged the debt within a six year period then it’s time to pay-up. If not, you are theoretically free to leave that debt unpaid forever, and you can even make a complaint to the Financial Ombudsman if the company in question continues to hassle you, without proof of liability.

But, do you really want that hanging over your head? What you can do instead is contact the company and make them an offer. The debt is not legally enforceable but it still exists. Make your debtor an offer, starting at around 10% of the total value, and see if you can’t properly get rid of that old debt; for a fraction of the price.


Filed under Debt Facts

This article was checked and deemed to be correct as at the above publication date, but please be aware that some things may have changed between then and now. So please don't rely on any of this information as a statement of fact, especially if the article was published some time ago.

18 thoughts on “Can old debts be written off?”

  • May Perkins

    May 11, 2016 at 7:58 pm

    My son and his wife emigrated to Australia 8 years ago leaving about £30.000 debt here,his marriage has now broken down and he wants to come back home..will he be responsible now fo this debt if he does return to the UK

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    • Jane Clack

      May 13, 2016 at 2:38 pm

      This is an “it depends” answer.

      Debts are normally statute barred in England and Wales if nothing has been paid towards them for 6 years or if the creditor has not acknowledged them in writing and the creditor has not gone for court action. To go for court action they had to issue a default notice and then submit a claim to the court using the last known address they had for the debtor. If the debtor did not provide updated contact details and so did not receive the claim form this does not negate the creditor’s claim.

      If the creditor(s) have gone for legal action then the debt is still enforceable. That means they can chase the debt through the courts and further enforcement such as bailiffs etc. Although it may have disappeared from their credit file if the creditor was unable to enforce the debt in the past because they did not have the correct address then the court will allow them to enforce the debt again.

      If the creditor(s) have not gone for legal action then if nothing has been paid to the debt for six years and the debt has not been acknowledged in writing then it is statute barred. This does not mean it has been written off but that the creditor cannot use legal action to try and get the money back.

      Reply Report comment

  • Sarah

    May 27, 2016 at 10:54 am

    Hi, I recently went bankrupt in 2015 due to a shortfall of £38k when my house was repossessed.
    As I wrote to the mortgage company pre BR saying I could not pay the amount owed, is this seen as confirmation I acknowledge the debt and can they chase me upon BR discharge? I did not sign any forms from the company and I just want to ensure they can’t still chase up the debt.

    Reply Report comment

    • Jane Clack

      May 28, 2016 at 10:22 pm

      If you went bankruptc after the repossession then any shortfall is included in the bankruptcy in England and Wales as it is a class action. The debt went into the bankruptcy if you live in England or Wales is the answer!

      Reply Report comment

  • helen

    July 29, 2016 at 4:30 pm

    I have debts over nine years old and they only just wrote to me asking me to pay it..what do I do?

    Reply Report comment

    • Jane Clack

      August 7, 2016 at 5:37 pm

      This question is asked repeatedly on this site. Basically if you live in England or Wales and you have paid nothing towards the debt in the last six years, you have not acknowledged the debt in writing and the creditor has not gone for a county court judgment – which could have been done at the last known address they had for you then the debt is statute barred. Once they have a county court judgment – even if it has fallen from your credit file – they can apply to the court to enforce it at any time as long as they can show why it was not enforced before ie because they did not have your correct address.

      The debt is NOT written off but it cannot be enforced if it is statute barred – this means they cannot take you to court if they had not done before. However, they could have sold it on and the new company be unaware that it is statute barred. So you can write to them – carefully not acknowledging the alleged debt but saying that surely this alleged debt would now be statute barred.

      National Debtline have an excellent factsheet on Liability for Debts and the Limitations Act which provides a template letter.

      Good luck.

      Reply Report comment

  • Gary

    September 17, 2016 at 7:07 am

    Hi there. I am being chased by a collection agency for money from credit card. I know I haven’t payed any money from ard Aug 2010. But i have been hounded by the them, so I decided to reply to an e-mail from them & offered to pay £450 of a £1750 debt.. They replyed saying fill out an attached form & they will submit the offer. They said debt will show as partly satisfied on my history until 6years from default date I asked for default date which came back from them as March 2012. Should I just wait another year & half paying nothing? Or is it now to late as I have now e-mailed them making an offer? Even though I have not filled out there offer form?? Or even just offer then 10% of debt?
    Many thanks

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    • Jane Clack

      September 30, 2016 at 12:09 pm

      I am afraid you have acknowledged the debt and so that starts the 6 year clock ticking again before the debt is statute barred. I think £450 is a good offer and means the six years will start when you make the payment but will run on anyway if you do not!

      Reply Report comment

  • Elisa

    October 6, 2016 at 2:53 pm

    Hi
    Is it staute barred if payments had been made via payplan?

    Reply Report comment

    • Jane Clack

      October 9, 2016 at 5:48 pm

      Unfortunately, if you were paying the debt through Payplan or any debt management company, the debt will not be statute barred. Basically for a debt to be statute barred in England and Wales you must have paid no payment towards the debt or acknowledged it in writing for 6 years since the payment became due. Payplan is acting on your behalf – you have made payments to Payplan which distributes them on a pro-rata basis to your creditors. You are making the payments, Payplan is distributing it on your behalf.

      Reply Report comment

  • Emma

    January 22, 2017 at 10:16 am

    I received a letter from a debt company stating I owe DWP £624, its the first I’ve even heard about this alleged debt, what will happen as I’ve received NO letter from DWP asking me to pay back this alleged overpayment.

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    • Jane Clack

      January 22, 2017 at 2:29 pm

      So write to them and ask for a breakdown as you do not feel you owe this alleged debt as you have heard nothing about this before – is it possible you do? Have you moved addresses so DWP could have sent to another address?

      Reply Report comment

  • Fred

    February 17, 2017 at 9:27 pm

    I have credit cards debts over £40000((4 credit cards)
    Been paying for last 7 years (£7.00 per month each)
    No missed payments.
    Where do I stand?

    Reply Report comment

    • Jane Clack

      February 22, 2017 at 5:54 pm

      If you have been paying the debts at a reduced rate for the last seven years then this will be reflected on your credit file. It will stay there for as long as you are making payments. If a default has been issued on any of the debts that will also be on the credit file but will fall off 6 years after it was entered. The debts will not be written off – in fact they never are but if you do not make a payment towards them or acknowledge them in writing for 6 years and the creditor has not gone for legal action they become statute barred. This means they still exist but the creditor cannot enforce them through the court any longer – however, if you stopped payments now they have six years in which to go for legal action. I would suggest you give Payplan a ring on 0800 280 2816 (which is free to mobiles) a qualified advisor will be able to offer more options and ideas for ridding yourself of the debt – or you can email me jane.clack@payplan.com with your details and I would be happy to contact you.

      Reply Report comment

  • Tanya delahay

    June 6, 2017 at 2:22 pm

    I have debts from about 9 yrs ago & 7 yrs ago
    I get them ringing me but i say the person is not here they need to speak to
    Wot do i do cos iv payed nothing to these people at all & have never written a letter to them
    Can i ask if the debt is statue by now cos its been over 6 yrs

    Reply Report comment

    • Jane Clack

      June 7, 2017 at 8:03 am

      Basically if you have not paid anything towards a debt in your sole name for 6 years since the last payment was made and you have not acknowledged it in writing, then the debt is statute barred as long as the creditor had not gone for a CCJ in the interim. If they have then the debt is never statute barred in England and Wales but if the creditor wanted to enforce it after 6 years had passed since the CCJ was granted, they would have to go back to court to do so and explain why they had not tried before. If it was because they did not have your current address when they tried it is a good enough reason to enforce. If you speak to them you can explain that the debt is statute barred and if they were to try to take you to court you would be defending on these grounds as it is up to them to prove it is not.

      Reply Report comment

  • Rob

    July 4, 2017 at 11:20 pm

    Hi

    My girlfriend has over 40 grand debt in rent to the council over a period of 4 years. Also she was bankrupt 2 years ago approx. Would they still expect her to pay the arrears they she said as long as she never approaches the council again they will let it go she had 2 children under 16.

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    • Jane Clack

      July 5, 2017 at 11:41 am

      This is a very odd question as it does not ring true.
      £40K worth of rent arrears to the council over the last 4 years and she was bankrupt 2 years ago – the arrears to this point would have been included in the bankruptcy but obviously written off by the council as she was able to stay in the property. Since then she may well have accrued arrears but any now are due to be paid or she will lose her tenancy if she is still living there. If this is really the case she needs to visit her local Citizens Advice Bureau or Shelter for some face to face advice.

      Reply Report comment

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