Question with regard to debt after 6 years.

[pelican8000]

I heard on the radio the other day that debts over 6 years old can be erased. Does anyone know if this is correct? Thanks.

[Loosehead]

They can be if the creditor no longer maintains an interest in the debt. There is no time limit for debts when the creditor is still interested in collecting. For example if you owe �1000 to a bank and they do not write and inform you the debt is outstanding for 6 years then the debt is gone however if they write after 5 years and say you are still liable then you still owe the debt and the 6 years start again.

[pelican8000]

OK thank you, I understand now.

[themas]

Loosehead's answer is not quite right. If there has been no payment of a debt (or part payment) for 6 years from when payment defaulted, and the debtor has not acknowledged that he/she owes the debt in that time then it becomes statute barred. All this means is that the creditor can no longer go to Court to get a judgement and enforce the debt. (The exceptions to this rule are if the debt was secured on property, or if the creditor went to Court and got a CCJ before the 6 years were up.)

Even after the 6 years, the debt still exists and the creditor can still pursue the debtor for it - it is just that he can't do so through the Court process.