The Limitations Act

The Limitation Act 1980 applies only when no contact has been made between the creditor and debtor within a certain time limit, this only applies to those within England and Wales.

  Unsecured Debt

The way that the Limitations act applies to unsecured is that if you have had no contact with the creditor for a period of six years or have not made a payment to the debt for that period, the debt will become Statute Barred meaning that the creditor can no longer use the legal system in order to get the debt repaid. Many creditors may contact you after the six years and insist that you begin to make payments.

If you do not agree that the debt is your responsibility and you refuse to make a payment, then there is very little that the creditor can do. If the creditor pursues you for this debt even though you have declined to make a payment, you may be able to able to claim harassment contrary to section 40 (1) of the Administration of Justice Act 1970.

The creditor can pursue the debt if there is a county court judgement against the debt, a payment has been made within the six years or you have admitted liability.

  Income Tax and VAT