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Statute Barred Debt in Scotland

Sharon McDougall - Updated - 30th January 2024 - 3 minutes to read

What is a Statute Barred Debt?

A statute barred debt is one that can no longer be collected by a creditor due to the elapsed time limit laid down in The Prescriptions and Limitation (Scotland) Act, 1973.

The rules for statute barred debt in Scotland differ from those in England and Wales. The timescale in Scotland is generally five years, whereas England and Wales impose a time limit of six years via The Limitations Act, 1980.

For a debt to be statute barred after the five-year timescale in Scotland, the following must also apply during this time period:

If the debt is in joint names, the criteria for statute barring also applies to the other party and they must meet the criteria described above.

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What are the statute barring timescales for other debt?

The five-year timescale applies to unsecured debt such as credit cards and personal loans, but what about other types of debt?

Here is a short breakdown for statute barring:

  • Mortgage arrears (capital): 20 years
  • Mortgage arrears (interest): five years
  • Council Tax and overpayments of Social Security Benefit: 20 years
  • Income tax and VAT: no time limits

Can your creditor chase you for payment of the debt, once it is statute barred?

Your creditor cannot chase you for payment once it is statute barred. This is an important part of the legislation, as once a debt has been statute barred you are protected from harassment or any other contact from the creditor. You cannot be pursued through the courts, as the debt is deemed to have either been abandoned or repaid.

An issue can arise, however, if your creditor hires a debt collection agency in an attempt to collect their debt, or continues to pursue you for the money themselves. Seeking the guidance of a professional advisor should be your first step, to make sure that the correct letter format is used.

You can write to the creditor, but it is important to make sure the wording is correct, and let it be known that this is a statute barred debt that no longer exists. The creditor or debt collector can be challenged if they try to collect their debt when they should know that it is statute barred, as described in the Financial Conduct Authorities guidelines:

You should also keep copies of all documentation in relation to the debt.

Scotland Debt Solutions can advise if you are being pursued for repayment by a creditor. We are highly experienced in dealing with all types of debt, and offer an initial meeting free-of-charge. Call our expert team to make an appointment at any one of our five offices throughout Scotland.

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Sharon McDougall

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Sequestration

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Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debts

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Trust Deeds in Scotland

Trust Deeds in Scotland

A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.

Find out More
Debt Arrangement Scheme (DAS)

Debt Arrangement Scheme (DAS)

A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.

Find out More
Business Debts
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Business Debts

Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRC

Business Debts

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