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The Most Often Asked Debt Questions: How Long Can You Be Chased?

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When taking into account the length of time a debt repayment has been outstanding, there are legal guidelines, known as a “statute of limitations” which is a legal guide for how long a debt can exist for before it becomes extinguished and legally dissolved and impossible to chase.

The amount of time a debt can be chased by creditors depends heavily on the type of debt it actually is.

For mortgage arrears, it depends on whether you owe mortgage capital or mortgage interest, for capital the time limit is 12 years, for interest it’s 6 years that the creditor has to raise legal action in order to recover the debt.

Many people asking the question, “how long can you be chased for a debt?” are often referring to unsecured personal debts.

In the case of personal debts the time limitation (under the statute of limitations act) is six years before the debt becomes extinguished.

For other types of debt such as council tax arrears or court costs the time differs and you should check with your local citizens advice or other financial advisory body.

When it comes to the amount of time you can be chased for debts, you need to be aware of which of your liabilities fall within the statutory limit and which do not, because if they have not been outstanding for longer than six years (even as they are unsecured debts) you may still be liable for the repayment and court action from creditors could follow.

Another solution: The IVA (Individual Voluntary Arrangements)

For people who have debt that is within the six year time limit and have no means of repaying that debt over a 12 month period, there is another solution.

The IVA is a debt solution that is becoming more and more popular among people who are suffering and in debt, it begins with a debt assessment, this assessment generally involves an in-depth look at your financial circumstances (income and outgoing).

The IVA is a big commitment however it has its advantages and disadvantages, see this page about the pros and cons with IVA’s which will give you all the information you need to assess if it’s suitable for you before applying.

Once you have red about the pros’ and cons of the individual voluntary arrangement and feel confident to proceed with a full debt assessment, you’ll get feedback from the debt adviser about if the IVA is suited to you.

There are a couple of IVA guidelines for qualification: firstly you must have a minimum of £5,000 debt and secondly you must have more than one creditor in order to be considered, these are both deal-breakers when it comes to qualifying for an IVA.

One big advantage with IVA’s is the fact they get your creditors off your back by protecting you with an ‘interim order’, another advantage is that they heavily consolidate your monthly bills and enable you to write of up to 85% of your debt.

For those who don’t qualify for an IVA there can also be other debt solutions that can be advantageous, such as the less formal debt management plan (DMP) which is like a lighter version of the IVA but with less legal power.

As a last resort there is also bankruptcy, however due to some of the consequences of bankruptcy it is recommended where possible to go for an IVA or a DMP, as there are less drastic disadvantages and implications on your finances.