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Collecting debts: how long do you have?
How long can I continue to chase what I am owed? Is there a legal time limit that will prevent me from pursuing unpaid invoices? These are common questions that debtors have regarding monies owed to them that we aim to explore in this blog.
How long?
A debt that can no longer be collected by a creditor, because a time limit has passed, is known as a statute barred debt. The time limit is set out in The Prescriptions and Limitation (Scotland) Act 1973. For unsecured debts, the timescale in Scotland is five years, compared to six years in England and Wales.
Once statute barred, a creditor cannot chase, harass or otherwise contact the debtor to recover the debt. The debtor cannot be pursued through the courts as the debt is effectively regarded as having been abandoned. A creditor can be challenged if they try to collect the debt when they should be aware that the debt is statute barred.
In order for the 5-year limitation to apply several conditions must be met. These conditions are that:
- The debt has not been acknowledged by the debtor
- No repayments have been made
- There has been no contact from the creditor with the debtor regarding the amount owed
- There are no decrees on the debt.
For other types of debt differing timescales apply. Indeed, for income tax and VAT there is no time limit. For Council Tax the limit is 20 years. With mortgages it depends whether it is capital arrears, in which case the time limit is 20 years, or arrears of interest, where a 5-year time limitation applies.
Considerations Before Action
If considering pursuing unpaid debts, there some factors to consider.
Clearly, given the statute barring legislation, it is important to establish how long the debt has been due. In most cases, this needs to be less than 5 years ago if you are to still to be able to try and reclaim the money owed.
It is very important to assess the current financial position of the debtor to understand whether the debt is worthwhile pursuing. It is possible that their position has changed, and the debtor is now in a position to pay the debt. Previously, it may have been the case that a business had been suffering from cash flow problems or unpaid debts of their own, but the position has now improved. Do not be too hasty in writing off a debt as irretrievably “bad”. It is possible to make appropriate enquiries to see if the debt can now be repaid. On the other hand, the status of the debtor may reveal that it is not worth the cost of pursuing what is owed.
Contact Our Debt Recovery Lawyers
Consulting experts in the field of debt recovery can result in a better outcome. Acting professionally and ethically, we at Yuill + Kyle can help you collect what you are owed while preserving the relationship with the client, where that is important to you. Contact us today on 0141 331 2332 or complete our online contact form.
Testimonials
Yuill + Kyle are an extremely focused firm who are achieving great results for us north of the border. Their client-focused staff keep us 'in the loop' so we are able to make timely decisions, helping us to recover more of our money.
I would not hesitate to recommend Yuill + Kyle's services to other business colleagues. I recently sent Yuill + Kyle's pre-sue letter to 2 debtors. Within 2 days of Yuill + Kyle sending these letters one of the debtors paid his £560 and the other his £750, all for the fee of a 7 day letter!
I instructed Yuill & Kyle to send a pre-sue letter to my debtor. This resulted in the debtor paying their outstanding £2750. We also received a letter of apology from them!! Great result!!
I have to say that Yuill + Kyle have represented my best experience to date with solicitors, and although I was unable to take this matter further on this occasion I would have no hesitation in using you again or recommending you to others.
I would really like to recommend your services to everyone considering litigation. Your online service is fast, efficient and easy to use. We found that your costs are simply unbeatable for pre-litigation and I feel sure that when we require legal support, Yuill + Kyle will be our first choice.
Yuill + Kyle successfully recovered £19,000 for our client. We were delighted with their professionalism and fully intend to use them again in the future.
"Stephen Cowan displays calm equanimity in the face of challenging, complex and often adversarial situations, and responds quickly and professionally."
Contact our debt recovery specialists.Call 0141 331 2332
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