Question of the week: Is it true unpaid debts get wiped after six years?

Q. Is it true unpaid debts get wiped after six years?

A. Yes and no. It's very complex, and it's rare to have a debt completely wiped... here's a broad brush answer.

What's commonly called the 'statute of limitations' means you can't be persued in court for civil issues six years after the event (five in Scotland).

So for a personal loan, credit/store card or bank a/c where there's has been no contact for 6+ years a lender usually can’t get a court action against you. This is increased to 12 years for mortgages/secured loans and indefinite for most tax debts.

Yet contact can mean anything, including making a payment, and that restarts the clock; courts may also extend the time e.g. if it thinks a lender has taken reasonable steps to contact you.

Plus some lenders still chase for the money after that period, but only a court can force you to pay. If that's happening, National Debtline has a good template letter, or get help before speaking to the creditor.


If you'd like to discuss this click reply below.

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