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, with England and Wales imposing 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.
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:
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 deal 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.
Paying off debt can be an exhausting task but for individuals in Scotland, there are Scottish support systems & steps you can take to become debt-free in 2021.
The government announced mortgage payment holidays through a broad Covid support package in 2020. But how do they affect credit ratings and are they worth it?
Our Scottish based team can help advise you on your debt problems.