Is a debt written off after 6 years?
Will my debt disappear after six years?
“My debt has defaulted; I’m making token payments towards it, but only for six years. After that, it’s written off. Happy Days!”
We can’t tell you how often this assumption has been made by people we have spoken to over the years. Let’s make something clear from the start: this assumption is incorrect.
TRDG is here, yet again, to separate the myths from the facts.
Let’s first look at when a debt can be written off:
Not in the mood to read? We got you covered. Listen instead by clicking YouTube link at the bottom of the page.
Commercial Decision
Debt being written off is usually a commercial decision by the debt owner. If they believe the circumstances surrounding the debt mean it isn’t worth pursuing, they may cancel the debt (write it off).
This doesn’t happen often, as the debt owner usually chooses the “sell” route. You can learn more about this by reading our article Why do debt collectors offer discounts?
Partial Write Off
The debt owner may offer you an opportunity to pay a reduced amount to clear the debt, with the remaining amount written off. This is known as a Partial Settlement. There’s more to this than meets the eye, though.
The Real Debt Guy has you covered on this subject; we have an entire article called What is a partial settlement - Can it help you? That will give you a clear understanding.
Of course, there may be legal or contractual circumstances that mean the debt is written off, but we’re just focusing on the most likely reasons. Let’s not get too technical.
Six years later...
The bad news first is your debt still exists. So, if you're making payments to the debt, you’ll need to continue to do so based on your affordability and keep communicating with the creditor.
If you haven’t been making payments or communicating about the debt with whoever is handling the debt, there may be good news.
Your debt may be statute barred, meaning you can’t be taken to court over the debt. It’s important to read our article -What is Statute Barred debt and How do I know if my debt is Statute Barred?- to be sure you fall into this category. Don’t just assume, double check.
What about my credit file?
Another piece of good news is that after six years of being registered as a default on your credit file, the default disappears.
Six years is like a punishment for defaulting (that’s if you think not being able to get into more debt easily for six years is a punishment).
Don't forget to read The Real Debt Guy's final thoughts below!
The Real Debt Guy is a qualified financial adviser and a UK debt expert. The information in this article is considered to be true and correct at the publication date.
