News

Debt Recovery Advice: How long can a debt collector legally pursue old debt?

We often get asked, how long can a debt collector legally pursue old debt? It is a commonly held belief that, should you have an old, unsatisfied, money Judgment against your debtor, you have lost the right to enforce payment. But is it true?

The idea may stem from section 24(1) of the Limitation Act 1980. The Act sets out that, after the expiration of a 6-year time period, action cannot be brought against any ordered Judgment.

However, the Courts have held that “action” means a fresh action – in other words, it does not include seeking to execute the existing Judgment against the debtor. Therefore, you may enforce judgements, no matter how old they are. Indeed, it has been determined that old Judgments can be used to Petition from a person’s Bankruptcy or to seek to Wind-Up a debtor Company.

However, whilst there is no absolute time limit, delay in seeking to obtain payment can have a detrimental effect.

Timing is key

We know that there’s no limit to the question of how long can a debt collector legally pursue old debt, but timing is usually very important when a creditor seeks to obtain payment from the debtor. Too much delay, and the debtor will be afforded the time to potentially put money out of reach. Further, interest on the outstanding sums may be limited by the Court to 6 years in certain circumstances.

Also, should the Judgment be over 6 years old then you will require permission to get Bailiffs or Enforcement Officers to attend the debtor’s property. The Court may also take any delay into account when approving methods of enforcement.

Should you have obtained a money Judgment against your debtor and you have not been paid, as at the time they failed to pay it and they either they did not have any assets or money at the time, or they had put them out of reach, then it is advisable that you do not simply forget about the Judgment. File the Judgment away and keep an eye on your debtor to see whether their financial circumstances improve.