Statute of Limitations for Debt in the United Kingdom

The United Kingdom has a specific act, the Limitation Act, that establishes how long a creditor can pursue someone for repayment of a past debt. However, the length of time varies considerably depending on the type of debt. Some debts can be pursued indefinitely.

Unsecured Debts

Money owed on credit cards or loans from banks or finance companies are unsecured debts. If six or more years pass without a payment, the person who owes the money can argue that the matter shouldn’t go to court due to too much time having elapsed. The Limitation Act prevents collection of these debts after six years of non-payment as long as the creditor doesn’t have a judgment against the person who borrowed the money, and the person hasn’t written to the creditor in those six years acknowledging the debt.

Mortgages

Creditors in the United Kingdom have up to 12 years to collect on debts related to delinquent mortgage payments.

Student Loans

The Limitation Act considers student loans to be simple contracts. The six-year rule that applies to other unsecured loans covers student loans as well. Creditors have six years to collect, starting from the date of the last payment or from the date that the loan recipient last acknowledged the debt .

Benefits

The right to go to court over a benefit overpayment made by the United Kingdom's Department of Work and Pensions also expires after six years. But that doesn’t necessarily prevent the department from collecting on old debts. It can collect on what’s owed even after six years if the person who owes the money still receives benefits, as the department is allowed under the law to bypass the need to go to court and just withhold benefit payments until a debt is repaid.

Debts to Government

No statute of limitations applies on money owed to government entities. Debts involving unpaid taxes can be collected at any time. That includes the Value-Added Tax (VAT), the 17.5 per cent tax that’s charged on goods and services in the European Union.

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About the Author

Jody Paterson is a longtime Canadian journalist who has worked for British Columbia newspapers since 1982. A former managing editor of the "Victoria Times Colonist," Paterson continues to write a column for the paper. She launched a small communications business in 2004 and expanded her work to include magazine pieces, newsletters, professional communications and strategy.

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