Can a creditor stop a debt becoming statute barred?

If you owe money to somebody and simply do not pay it they will normally try to take legal action against you to enforce the payment of their debt. If they do nothing or the appropriate enforcement action is not taken this will allow the debt to become statute barred after sufficient time has passed.

If you refuse to pay or acknowledge a debt the first action that the creditor will take against you to prevent it becoming statute barred will be to apply for a County Court Judgement (CCJ). This is a court order specifically requiring you to pay the debt owed.

On the date that the Judgement is issued the time clock before the debt can become statute barred starts again. As such if you have not paid a debt for 5 and a half years the debt would become statute barred after 6 years have passed if the creditor continues to do nothing. However if after 5 and a half years they get CCJ against you the six year clock starts again.

A CCJ does not mean a debt can never be statute barred

The fact that a creditor has issued a CCJ against you does not in itself force you to repay the debt that you owe. After receiving a Judgement you can still ignore the debt and refuse to pay it. If the creditor then takes no further action to enforce payment and 6 years pass from the date it was issued the debt will become statute barred.

To prevent the debt becoming statute barred after a Judgement has been issued the creditor must enforce the payment of the debt with further legal action such as an attachment of earnings order against you or a charging order against your home if you are a home owner.

If the creditor gets an attachment of earnings against you this means that payments towards the debt you owe will be taken from your wages before you get paid. There is then nothing you can do to prevent the repayment of the debt.

If the creditor successfully gets a charging order against your property the debt cannot then become statute barred. The charge will remain until such time as you pay the debt or you sell your property and the balance of the debt is paid from the proceeds of the sale. Your house may not be sold for many years into the future. However the debt still stands and is protected from the statute of limitations.

Will hiding help a debt to become statute barred?

If you move and do not tell the creditor your new address you may wonder whether this will help your debts to become statute barred.

If after you move you successfully manage to ignore any attempts by your creditors to contact you then this might be a successful strategy. However if normal attempts to contact you and collect the debt that your owe fail the creditor still has the option to issue a CCJ against you at your last known address.

If you are not living at your last known address and the creditor has no details of your current address or employment it will be extremely difficult to force the payment of a CCJ by issuing an attachment of earnings or using a bailiff against you. As such if you hide from a creditor for six years from the date a CCJ was issued the debt will probably become statute barred and you could avoid its repayment.

If you are a home owner the likelihood will be that the creditor find out your new address and if you ignore a CCJ they will simply apply for a charging order against your property.

BMD Tip: If you move and change your address with your bank this information will be passed by them to the credit reference agencies. It will therefore be relatively easy for your creditors to find you. As such the only way hiding from your creditor will work is if you move abroad or give absolutely no-one your new address details.