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What exactly does ‘Statute Barred Debt’ mean?

Statute Barred Debt is debt that might have become unenforceable if a creditor has not gone to court or contacted you within the time limit set out in the Limitations Act 1980 i.e. in England and Wales the time limit is six years. We need to point out, however, that while the time limit for unsecured debt is six years, it increases to 12 years for debt associated with mortgage shortfalls.

The key points for deciding whether or not unsecured debt is statute barred are:

  • You haven’t made a payment to the debt for more than six years
  • You haven’t had any contact from the creditor during this time
  • The creditor has not applied to a court for a CCJ
  • Even if you have had some contact but have not acknowledged the debt in writing, it is still statute barred
  • Please note, if the debt has been sold the clock does not reset to the date of the new acquisition, it remains the original date

However, don’t believe for a minute that this will stop debt collectors which have bought the debt from trying it on, knowing full well that few people know their rights. The best thing to do is to simply ignore the calls / letters. It is very risky challenging the debt collector in writing as you might be unwittingly acknowledging the debt. Although unlikely, if you were to receive CCJ documentation from Northampton County Court for a CCJ, it should be challenged immediately if it falls into the above criteria.

Bankruptcy UK offers a full bankruptcy administration service and will submit your bankruptcy application online. Court appearances are no longer required for bankruptcy. Call us for bankruptcy help on 01425 600129 or for an informal chat about your circumstances.


White House ‘Looking closely’ at including student debt in bankruptcy

March 2015 – President Barack Obama has asked administrators to table proposals for including certain types of student debt, especially that loaned by private companies, in bankruptcy. Federal law currently prohibits any student debt, whether from private companies or the US Government from being liquidated in bankruptcy.

Private loans currently make up about 10% of all student loans, with the remaining 90% made by the federal government thus opening the door for student debt made by private lenders to be treated on par with credit card debt and mortgages.

The concern, it seems, is that an increasing number of post graduates are falling behind in payments, while others have defaulted altogether. If the initiative proceeds, private lenders would face stricter federal oversight and rules designed to make them more proactive in reaching out to distressed borrowers and offering better repayment terms.

As it stands, it is not possible to include student debt in a UK bankruptcy.

Insolvencies on the decline … but only just

The Insolvency Service has reported that the number of insolvencies has decreased by 4.6% compared with the same time last year, yet there were still a whopping 24,840 insolvencies throughout the UK.

The number of bankruptcies had eased somewhat due mainly to the introduction of Debt Relief Orders, which is a type of ‘mini bankruptcy’ for those on very low income with less than £15,000 of debt. However, bankruptcies may well increase again as continued disillusionment with IVAs results in people abandoning these in favour of bankruptcy.

Another factor which might lead to an increase in the number of court sanctioned insolvencies is a growing awareness of the futility of Debt Management Programmes. Most people realise that the capital is never paid off and that promises of interest rate freezes are only temporary.

To be fair, Debt Management Programmes do keep creditors at arm’s length, but they don’t solve the problem which is getting rid of the debt.

Bankruptcy UK offers a full bankruptcy administration service and will submit your bankruptcy application online. Court appearances are no longer required for bankruptcy. Call us for bankruptcy help on 01425 600129 or for an informal chat about your circumstances.

Donald Trump and Bankruptcy – it’s nothing personal

A business filing for Chapter 11 bankruptcy in corporate America hardly raises an eyebrow these days, but the multi billionaire with the dodgy hairstyle has taken it to a whole new level, with four corporate bankruptcies since 1991.

Following the collapse of his Taj Mahal venture in the early 90s, there have been further corporate bankruptcies in 1992, 2004 and 2009. Yet what would seem like a catastrophe for you and I, is little more than ‘the restructuring of loans’ at this level and on this score Trump has no equal.

With his ‘Win –Win’ philosophy in business, Trump has won over the banks time and again with tempting deals. For example, when Trump Hotels and Casinos went belly up in 2004 he surrendered his control of the Corporation and in doing so, secured lower interest rates and another loan to upgrade the properties.

Trump’s secret is to never get personally involved and to keep his personal finances separate from those of his corporations. That and keeping his job as CEO which pays plenty of money.

Pensions not affected by Raithatha v Williamson Case

The High Court has refused to follow the Raithatha v Williamson case, where it was held that a bankrupt aged 55 or over could be forced to draw down his/her pension to pay creditors. Prior to May 2000, a bankrupt’s personal pension vested in their Trustee in Bankruptcy.

This changed following the introduction of the Welfare Reform & Pensions Act 1999 and pensions were finally deemed untouchable following the Lesser v Lawrence and Krasner v Dennison cases in 2000.

The case is going to appeal in the Court of Appeal, but it looks as if, for the moment at least, the Official Receiver and Trustees cannot compel a bankrupt to draw down his/her pension if the bankrupt has not already elected to draw on his pension prior to the bankruptcy. So pensions are once again off limits as the law originally intended.

As it stands, the OR / Trustee can only:

(a) Challenge any excessive contributions made by a Bankrupt into a pension scheme on the basis it was an attempt to put assets out of the reach of creditors or

(b) Include any income received by a bankrupt from a pension scheme as part of an Income Payments Arrangement / Order

Feel free to call us with any bankruptcy questions or for bankruptcy help on 01425 600129.

HMRC Statutory Demand is worrying me

HMRC are proceeding with bankruptcy action against me as I owe them £40,000 and have rejected my offer of payment. I was served with a Statutory Demand two weeks ago. What will happen now? Will the court write to me or will they call at my address again? Do I have to attend the High Court hearing and how much notice will I get? Also, do I have to fill in the same bankruptcy forms as if I were applying myself?


If it gets as far as a hearing, you should be served notice no less than 14 days beforehand, but you are not obliged to attend court unless you have an objection. No one will come to the house and the documents are different from those if you were arranging your own bankruptcy, but it’s still do-able.

The good news is that you will be able to include any other unsecured debts in the bankruptcy. What we weren’t clear about is your residential status, whether you own a car and what your earnings are. One of the negative aspects of this action is that of an Income Payments Agreement, whereby any surplus income is attached for three years. Give us a call if you need help, as we have specialised knowledge of what can be claimed for expenses in bankruptcy.

Bankruptcy UK offers a full bankruptcy administration service and will submit your bankruptcy application online. Court appearances are no longer required for bankruptcy. Call us for bankruptcy help on 01425 600129 or for an informal chat about your circumstances.

Debt linked to Depression | Serious Debt Solution Provider

Of course debt linked depression exists. Most ordinary people have felt it. Maxed out credit cards and overdraft facilities … payday loans … the spectre of County Court Judgements and foreclosures. It’s enough to drive someone over the edge. The fact is, people often misjudge situations and before you know it, they have a load of minimum payment facilities and no way of making it through the next month.

An Insolvency specialist is trained to limit damage, but sometimes the best solution is also the most straightforward – simply declare bankruptcy. Believe it or not, the right to a ‘fresh start’ following a bankruptcy is actually enshrined in the Insolvency Services’ Technical manual. Okay, if you’ve only got a few thousand outstanding there are probably better ways of dealing with it, but for those who have unmanageable debts, bankruptcy is almost certainly the best way forward.
debt linked depression

You might be surprised how many people tinker with the likes of IVAs and Debt management plans before taking the plunge, but these only serve to draw out the process by anything between 5 – 20 years. And during all of that time, your credit rating is ‘trashed’, you’re not worth a bean on the high street. Did you know that the average credit rating for someone who has been discharged from bankruptcy for just 18 months is 700 – 750 or ‘fair’?

Fear and pride are often the two things that stop us from making the right decision. In many cases, people just don’t know the facts surrounding bankruptcy. We’ve recently posted ‘Bankruptcy Myths … the definitive Guide’ on this website which debunks most of the nonsense. Give us a call if you still aren’t sure, we’ll gladly give you half an hour of our time.

Feel free to call us with any other bankruptcy questions or for bankruptcy help on 01425 600129.

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If you are a homeowner and you have equity

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We can give you an interest free cash advance from your house sale proceeds when we are purchasing your property.  This stops all bankruptcy proceedings immediately, and can help you move forward stress free.

Will I lose my laptop if I go bankrupt?

No, personal possessions – within reason – and household goods are exempt from bankruptcy, though any financial resources will be attached – including premium bonds, savings, etc. The exception to this are HMRC approved pensions, which are currently ring posted in bankruptcy.

There was a move made last year to attach pensions of those aged between 52 – 54 i.e. force them to take the cash portion of their pension and have it attached, but this was blocked by the Law Lords.

You are usually allowed to keep a car provided it is a) not worth more than £1,000 and b) clearly needed for work or some other important purpose like doing care work.

Bankruptcy UK offers a full bankruptcy administration service and will submit your bankruptcy application online. Court appearances are no longer required for bankruptcy. Call us for bankruptcy help on 01425 600129 or for an informal chat about your circumstances.

Expert Business Consultant Available To Speak to Today

Great News! Our business turn around and recovery division is stronger than ever with the client service that we can offer directors looking to establish a clear route through difficult decisions that may need to be made.

These difficult times hit us at times where we could really do without it.  We are able to offer a telephone consultancy or face to face visit at short notice for directors who need to make urgent decisions about their business options. We have experience of dealing with business recovery issues at all levels, including PLCs.

Ordinarily company directors stick with the accountants and solicitors who were appointed when the business was solvent and ‘doing well’, but these professionals are not always appropriate when it comes to business survival.

If you have a business that is about to hit the rocks, then call us and let’s see if we can change the outcome.

You can call our 24 hr helpline 0800 597 7977 or speak to Sean direct on 07812 917002



Bankruptcy UK

Bankruptcy UK