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What is the Limitations Act
The Limitations Act 1980 outlines the period of time a creditor has to take action against their customers for outstanding debts. The act only applies when no contact has been made between a creditor and its customer within the given time limit and only applies to residents of England and Wales.
Time limits are different and can be extended by the courts, but they largely dependent on the type of debt that you have.
Unsecured Debt
Unsecured debts are debts that are not secured against your property examples of which are overdrafts, loans, store cards, credit cards etc.
If a creditor hasn’t spoken to you for a long period of time, you may assume that they have forgotten about the debt or that they have written the debt off. In many cases, it could be due to your failure to inform them of a change of address, however the debt will still exist and creditors are entitled to chase the debt indefinitely even after the debt has become Statute Barred.
Creditors can only use the legal system to recover the monies for up to 6 years after the last payment was made to the account. However Creditors are still able to pursue an unsecured debt if:
- They have obtained a judgment against you CCJ
- You have made a payment to the creditor within the last 6 years
- You have NOT written to the creditor acknowledging that you owe the debt during the previous six years.
Statute Barred Debt
If a creditor continues to contact you after accepting that a debt is Statute Barred, and you have stated that you no longer intend to pay the debt, you may be able to claim harassment contrary to section 40 1 of the Administration of Justice Act 1970.
County Court Judgments
If the creditor has an outstanding County Court Judgment against you, then you cannot use the Limitation Act to dispute you owe the debt and it does not matter how many years ago the creditor went to court, the County Court Judgment will still exist. Call us today and our experienced debt specialists will provide you with advice as to how you can manage your debts and offer you no obligation advice about the solutions available to you.