How to recover a 5-year-old debt

If you’re owed a debt and have not received any payment for five years, you need to act fast to avoid the debt becoming statute-barred by the statute of limitations set out in the Limitations Act 1980. Previously we looked at some of the reasons why it may be worth chasing debts that are stillRead More

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If you’re owed a debt and have not received any payment for five years, you need to act fast to avoid the debt becoming statute-barred by the statute of limitations set out in the Limitations Act 1980.


Previously we looked at some of the reasons why it may be worth chasing debts that are still outstanding from early in the recession – with a six-year limit on most debts, that takes us back as far as mid-2009 right now.

If, therefore, you are owed a debt from the latter part of 2009, and have not taken action to recover it in the meantime, you are running out of time to get it acknowledged or partially repaid, before you simply lose the right to chase the debtor.

HMRC explains it as follows:

“If a lender allows time to pass without receiving any payment an action for recovery may become barred.

“Under the Limitations Act 1980 the time limits are:

• in simple contracts, 6 years;

• in contracts under seal, 12 years.

“If the debtor acknowledges the debt in writing or makes a part payment within the original limitation period, then the time limits start to run again from the date of acknowledgement or the date of payment.”

What can I do?

If you know the deadline is approaching on an outstanding debt, act fast – contact us today to start chasing the debtor (or tracing them, if you’ve lost contact with them).

Remember, five years’ worth of statutory interest can substantially add to the total amount you may be able to recover, so even if you’ve given up hope of getting paid, it’s worth reconsidering whether to take action.

We can offer tracing services to track down debtors who have ‘gone missing’ in the years since they failed to pay you, so it’s not hopeless if you don’t know where they are now.

Once we re-establish contact, with an aged debt the important thing is to get acknowledgment that the amount is still owed, or a partial payment to reset the clock on that six-year limit.

It’s also worth remembering that, although you lose the legal right to chase the debtor for payment at six years, that does not mean they can’t still pay you if they choose to.

For example, a business relationship that broke down right at the start of the recession could still be salvaged if the debtor’s fortunes have improved more recently.

Consider contacting former clients to see if their business is on a firmer footing – and if you think you can trust them to pay promptly in future, perhaps offer to revive your supply agreement on the provision that they clear their old debts.

Once the six-year deadline has expired, there may be no legal obligation for them to do so, but it might still prove to be enough to get some or all of what they owe you, and potentially to bring them back on to your client roster at the same time.

If you would like more information on collecting old debt read our blog that was posted earlier this week; 5 steps to recover old debts or give the team a call on 0808 163 7967.

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