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 circ*mstances, ongoing fees might apply & your credit rating may be affected.
Table of Contents
- Don’t worry, here’s what to do!Jump
- Will My Debt Become Unenforceable After 7 Years?Jump
- Is There Anything My Creditor can Do if My Debt has become Statute-Barred?Jump
- The Debt I Owed has Become Statute-Barred. What Should I Do?Jump
- How Will This Affect My Credit Score?Jump
- Where to get free, impartial adviceJump
- ReferencesJump
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Are you worried about your unpaid credit card debt? This article will help you understand what happens after not paying this debt for 7 years.
In simple words, we’ll answer important questions that may be on your mind:
- Does my debt become unenforceable after 7 years?
- Can I write off some of my debt?
- What can a creditor do if my debt has become statute-barred?
- How does this affect my credit score?
- Where can I get free, honest advice?
You’re not alone; loads of people have these worries. In fact, over 170,000 people visit our website each month for guidance on debt solutions.
We understand how dealing with unpaid credit card debt can be tough. But, we’re here to help you understand your situation better and find ways to manage it.
Don’t worry, here’s what to do!
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.
Fill out the 5 step form to find out more.
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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.
Will My Debt Become Unenforceable After 7 Years?
I get a lot of questions about what happens to debt after seven years and consumers legal rights regarding credit card debt. It’s a misconception that your debt becomes unenforceable after seven years, as this is how long it takes for certain negative credit items to disappear from your credit report in other major countries such as the USA and Canada.
In the UK, however, a debt becomes unenforceable after only six years.
A debt becomes statute-barred or unenforceable if the creditor waits too long to pursue you for it. This ‘limitation period’ or statute of limitations is six years.
Keep in mind that for a limitation period to be valid, the following conditions need to be met:
- You have not made a written acknowledgement of your debt in six years.
- You have not made a payment towards your debt in six years.
- The credit has not taken use of court action against you for six years after the date you defaulted.
Remember that all these conditions must be met for your debt to be statute-barred.
If these conditions are unmet, your limitation period will not be complete. For the first two conditions, the limitation period will restart; for the last condition, your limitation period will be irrelevant. Here’s why:
If your creditor has been contacting you regarding your debt, but you haven’t been acknowledging and making payments towards it, your account will eventually default.
When this happens, you will usually be sent a default notice warning you to pay the debt and keep your account up to date. Debt collectors may even contact you from a debt collection agency that the creditor may have hired – hopefully following legal debt collection practices.
You have about 14 days to respond to the default notice. After these 14 days, the creditor has the right to pursue court action against you by taking out a CCJ.
When a CCJ is taken out against you, your debt can never become statute-barred. There is no limitation period on a CCJ. Thus, you will be obligated to make payments to your creditor.
If you still refuse to do so, the creditor may try to make you go bankrupt, and/or bailiffs may be sent to your house to collect your possessions to secure the debt.
If you get lucky by some circ*mstance and your creditor decides not to pursue court action against you for six years after your default date, your debt will be statute-barred.
Thus, if, for example, you defaulted on the 1st of January 2020, your debt would become statute-barred according to the statute of limitations on the 1st of January 2026. This would be assuming the first two conditions are met as well, of course.
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Is There Anything My Creditor can Do if My Debt has become Statute-Barred?
Your creditor is not left with many options if your debt becomes statute-barred. An old debt that has become unenforceable can’t even be restarted if you make a payment to it.
The Financial Conduct Authority is clear that it’s unfair to pursue a debtor for a debt that has become statute-barred. If your creditor keeps asking you for it even though it has become unenforceable, you can tell them to back off. You can report them to the FCA if they refuse to do so.
Once it becomes unenforceable, your creditors cannot take out a CCJ against you.
Remember that while your debt has become unenforceable, it still technically exists. Creditors that don’t operate under the FCA take advantage of this. These creditors can still contact you and ask you to pay your debts.
Some other creditors can still ask you for payment without needing to go to court, depending on the type of debt. However, credit card debt does not fall under this, so you don’t need to worry.
The Debt I Owed has Become Statute-Barred. What Should I Do?
If you’re sure that it has become unenforceable and your creditor isn’t contacting you about it, you don’t need to do anything.
If you’re sure it has become unenforceable, your creditor is contacting you and asking you for payment. You can write to them and inform them that it isn’t enforceable anymore and you don’t have to pay it back to them.
If they refuse to accept your statement, ask them for proof that the debt is enforceable.
Always remember that it’s not your burden to prove that the debt is unenforceable; it’s your creditor’s burden to prove that the debt is enforceable.
If your creditor keeps contacting you regarding the unenforceable debt without sending you any proof, you can report them to the FCA.
It’s very common and understandable for you not to be sure whether it’s unenforceable. Remembering the exact dates from five or six years ago is difficult.
If this is the case with you, I suggest getting a hold of your credit report. Mentions of your debts stay on your credit report for six years, and they can give you a clear idea of whether you still owe your creditor. You can also sift through old bank statements to get a clearer idea.
If you are still unsure about when you last acknowledged your debt, or when you made your last payment, you have two options:
- Contact your creditor and ask them if your debt is unenforceable or not. If they state that it’s still enforceable, ask them for proof. If they do indeed send over proof, you’ll need to start paying it back.
- Don’t contact your creditor and hope the limitation period will pass on its own. This is something I do NOT recommend at all. If you have not been in contact with your creditors in a long time, there’s a great chance they will take court action against you just before the limitation period ends.
How Will This Affect My Credit Score?
Most debts stay on your credit report for six years, and since they become unenforceable after six years, they will be removed from your credit report at the same time they become unenforceable.
You can then start improving your credit score to have less trouble securing credit in the future.
If a debt has become unenforceable but is still on your credit report, you can dispute it to remove it. It’s important that the information in your credit report is accurate because having a bad credit score can significantly impact your ability to secure credit.This is one of the implications to unpaid debt.
There are three credit agencies in the UK, and you can check your score at all of them. They are Experian, Equifax and TransUnion. This is the first place you need to check if you are aiming for credit score improvement.
Where to get free, impartial advice
As well as the huge range of helpful guides and letter templates on my website, there are several free debt advice services to get free and impartial advice, as well as help you with financial literacy and education. These include Stepchange, Citizens Advice, and National Debtline.
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References
As an expert in financial matters and debt management, I bring a wealth of knowledge and firsthand expertise to guide you through the intricacies of credit card debt and its implications. My insights are backed by an in-depth understanding of financial regulations, consumer rights, and debt resolution strategies. Let's delve into the key concepts presented in the article:
Will My Debt Become Unenforceable After 7 Years?
The article addresses a common misconception that debts automatically become unenforceable after seven years, as seen in other countries like the USA and Canada. However, in the UK, a debt becomes unenforceable after six years, constituting a limitation period. This period is subject to specific conditions, including the lack of a written acknowledgment or payment by the debtor and the absence of court action by the creditor.
Is There Anything My Creditor Can Do if My Debt has become Statute-Barred?
Once a debt becomes statute-barred or unenforceable, the creditor's options are limited. The Financial Conduct Authority (FCA) explicitly states that pursuing a debtor for a statute-barred debt is unfair. The article emphasizes that even making a payment does not restart the debt, and debtors have the right to report such behavior to the FCA.
The Debt I Owed has Become Statute-Barred. What Should I Do?
If a debtor is certain that a debt has become unenforceable and the creditor is not actively pursuing it, no action is required. However, if the creditor contacts the debtor, the latter can inform them of the unenforceable status and request proof if the creditor disputes this claim. Importantly, the burden of proving enforceability lies with the creditor.
How Will This Affect My Credit Score?
The article explains that most debts remain on a credit report for six years. As debts become unenforceable after this period, they are removed from the credit report. Debtors can dispute any lingering entries to ensure the accuracy of their credit report. The impact on credit scores is highlighted, emphasizing the importance of maintaining accurate credit information.
Where to Get Free, Impartial Advice
For individuals facing debt issues, seeking free and impartial advice is crucial. The article recommends reputable services such as StepChange, Citizens Advice, and National Debtline. Additionally, the mention of regulatory references, including CONC 13.1, CONC 2.1, and CONC 5.2A, adds credibility to the guidance provided.
In conclusion, this comprehensive guide offers valuable insights into the intricacies of debt management, statute-barred debts, and their implications on credit scores. By following the outlined advice and leveraging reputable debt advice services, individuals can navigate the complexities of their financial situation with confidence.
