Statute Barred Debt in Scotland

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.

When a debt has been statute barred in Scotland, this means that it ceases to exist in law and therefore creditors can no longer take legal action to recover the money owed.

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:

• The debt has not been acknowledged by the debtor 
• The creditor has not taken legal action to recover the debt
• No repayments have been made

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.

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:

• “It is misleading for a firm to suggest or state that a customer may be the subject of court action for the sum of the statute barred debt when the firm knows, or reasonably ought to know, that the relevant limitation period has expired.” 7.15.7 Guidance
• “A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred.” 7.15.8 Rule

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

If you are struggling with debt which you cannot repay, Scotland Debt Solutions can help you now rather than waiting for the debt to become statute barred. We are highly experienced in dealing with all types of debt, and offer an initial meeting free-of-charge where you can get expert help and advice and better understand the options open to you. Call our expert team to take the first steps towards a brighter future.