Old Debt – What Happens to it

If a debt goes for a period of 6 years without any attempt at contact between the debtor and the creditor it becomes “statute barred”.  This means that although the debt still exists the creditor cannot take any legal action relating to it.  So you cannot be given a County Court Judgement or be made bankrupt over a statute barred debt.  The fact that no action can be taken often means that creditors in this situation will accept a nominal sum to settle the debt.

If you have a very old debt that has not been chased for a long time what you must not do is try and contact the creditor in any way – this will re-start the 6-year period.  Also note that the 6 years rule doesn’t apply if the creditor has been making reasonable efforts to contact you if for instance you have moved.