Debt Question...

[bexbex78]

If you owe a debt recovery company money and haven't paid it for over six years...shouldn't it be written off? Someone told me that a debt was written off after just five years.

[Loosehead]

There is nothing to force a company to write off debts, some do after a period of time but more usually they'll pass them to a debt recovery company and some time in the future if you acquire some wealth and they track you down then its payback time! There is no time limit. Why do you think it should be written off? you borrowed it why do you think you can welsh on it? Curious. The 5 year rule refers to bankrupts, even then the debts could still be collected down the line if the money to pay is seen to be acquired by the, now discharged, bankrupt.

[Oneeyedvic]

it is also down to how often a company must stay in touch. Essentially, a company can't turn up after 10 years and say "oh by the way you owe us �500".

So long as they keep in touch at your last known address every 5 years, they may keep pursuing the debt until you pay it off.

[bexbex78]

It's just what I've been told...five years all debts are clear. But if that were the case I suppose everyone would never pay a debt.

[Mrs_Pegasus]

After 7 years companies will normally write off the debt because of inland revenue being able to claim back tax for the same period (and I think the VAT man).

Some debts are uneconomical to pursue and get written off sometimes at the end of the financial year but it depends on the amount of the debt and whether there is contact being maintained.

[Didwot]

The Limitation Act provides that most debts cannot be claimed after 6 years. Time runs from the latest of the date the debt became payable, the date of the last payment, or the date on which the debt was last acknowledged in writing. If you have been sued, and judgment obtained then the judgment can be enforced for ever. If the debt arose out of a deed (eg a mortgage) then it can be claimed for up to 12 years.