As debt recovery specialists we’re often asked questions about the rules surrounding debt collection, and recently we were asked if money owing to someone from a long while ago can still be pursued, or whether it is too late.

Before we delve into the facts, it is important to remember the golden rule in debt recovery –time is of the essence.  When payment becomes overdue it is vital that you act as quickly as possible to maximise your chances of making a full recovery. Although, we know that, as a business owner, finding the time to chase your customers for payment can be challenging, and is a task that often falls to the bottom of the priority list.

Sounds familiar? If so, perhaps it’s a good time to consider outsourcing your debt recovery needs, and by doing so, free up time to do what you do best! But for now, let’s focus on the question in hand – Can you recover debts from a long while ago?

There is a time limit on recovering debts

For debts that are under the terms of a contract there is a statutory limitation period of six years which runs from the date that the debt is due. This generally means that once the limitation period is up you can no longer seek to recover the money you’re owed. The Limitation Act 1980 outlines that this would apply to any contract of law which—

(a) does not provide for repayment of the debt on or before a fixed or determinable date; and

(b) does not effectively (whether or not it purports to do so) make the obligation to repay the debt conditional on a demand for repayment made by or on behalf of the creditor or on any other matter

As such, there are some circumstances in which the limitation period would not apply.

Extending the limitation period

If, during the 6 years starting from when the debt was due, part payment is made against the debt or a demand for repayment is made in writing by or on behalf of the creditor it may be possible to extend the limitation period. However, there are various factors to be taken into consideration and so it is best to seek advice as to whether the six year limit would be extended for your individual case.

If the limitation period has expired it provides a default payer with an impregnable defence to a claim. Although, this does not necessarily mean that we cannot assist you to try and recover the money you’re owed. For a number of our clients we do recover debts which have passed the strict limitation period.

Whilst the ideal situation is not to allow debts to reach the point at which they are at risk of being statute barred, if you do have old debts we may be able to take fast track action to protect your position by issuing proceedings. Alternatively, if the debt is already statute barred, we may be able to adopt a recovery strategy.

To discuss how we can assist you in recovering the money you’re owed please get in touch. 

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