The first thing to do when you start to deal with your money worries in Scotland and become debt free is to be honest about what you owe and to who.
Scotland’s Trust Deed is a company who are experts in helping Scottish people who are struggling with the burden of unmanageable debt. Our friendly, knowledgeable and non-judgemental team will help you decide which debts need to be dealt with first and how that might be done.
At the beginning of the debt management process, it is important to make a comprehensive list of your creditors and the amount you owe them. This may mean going through long ignored paperwork and discovering debts that you have forgotten.
There are few creditors who will allow a significant amount of money owed to them to slip through the net. However, if the amount that you owe on this old debt is quite small then it is possible. So, what should you do about it?
Statute Barred Debt
A statute barred debt can’t be collected by the creditor because a certain amount of time has gone by. This is covered by The Prescriptions and Limitation (Scotland) Act of 1973.
The time limit for debt recall in Scotland is five years, as opposed to the six years in England and Wales. After this time a creditor is not allowed, by law, to demand the repayment of the debt.
There are restrictions however and these rules must also have been followed before you can happily write off the old debt you have discovered:
- The debtor must not have contacted the creditor about the money owed within those five years.
- There should be no court decrees or action against the debt.
- The creditor cannot have been in touch with the debtor about the debt within those five years.
- You should not have paid any money off the debt within those five years.
These rules apply to any individual who has joint responsibility for the debt. So, for example, if the debt you have found is in joint names with a previous partner then, if possible, check to see if they have been managing the sum owed.
A statute barred debt is usually an unsecured one such as a store card, credit card or personal loan. The last £50 on a catalogue account is a debt that may have been ‘forgotten’. Timescales apply to capital mortgage arrears and council tax but they are much longer (20 years) and it is very unlikely that contact will not have been made by the bank, building society or council within that time.
What to do if you are chased for a statute barred debt
Once five years (in Scotland) have passed and the criteria have been met, the creditor is not legally allowed to chase, harass or contact you about the debt. If this happens it is important to contact someone with professional experience.
This may mean speaking with the team at Scotland’s Trust Deed about contacting the creditor or the credit collection agency to remind them that yours is a statute barred debt and that effectively it no longer exists.
To get advice and help on existing debt and potentially statute barred debt then get in touch with the helpful, experienced team at Scotland’s Trust Deed today on 0141 297 1178.