Debt Collection – How long do you have?
Debt Collection: Don’t let time run out
Are your client invoices being left unpaid? Do customers or clients have longstanding debts? While debts and late payments are an unfortunate fact of business life, they can seriously hit your cash flow and become a stressful drag on your operations. And the longer you leave them, the harder these debts can be to recover. In fact, if you let a debt run too long, it could even become void
UK Debt Collection – Time limits on UK debt
In the UK, there is a clear time frame for the recovery of debt: six years. After this, debts enter a status known as Statute Barred, the details of which are laid out in the Limitation Act 1980. Under these rules, a creditor has only six years from the last known payment or acknowledgement of the debt, so the six-year period resets if any acknowledgement of the debt is made within the time frame. This acknowledgement can take the form of a letter or an email from the debtor, specifically agreeing to the debt in question.
While the existence of a time frame can seem like a hindrance, it is a relatively long time for both parties, allowing creditors to give their debtors space to arrange repayments or to address the reasons for the debt. These could include financial difficulties or upheaval at the company, which has affected their ability to pay, circumstances that can be all too common at times of economic upheaval.
If you have concerns about a long-standing UK debt and are worried about running out of time to collect a debt, we can help. Our debt collection experts can help you navigate a path through the rules and regulations to ensure that time doesn’t run out.
International Debt Collection – Time limits on international debt
When you are facing a debt recovery problem with an international debt, this can present a greater challenge than UK-based debt.
The potential problems associated with international debt collection mean that these debts are more likely to become long term issues in comparison to UK debts. In fact, some businesses fear that if a debtor is not located in the same country, it will ultimately be irrecoverable.
This is certainly not the case – however, understanding international debt and the associated time limits requires knowledge of how debt collection works in that particular territory. Most countries have their version of the Statute Barred rule, but the time limits involved vary from nation to nation, or even from region to region. For example, in the US state of California, the time limit for recovering debt without limitation is four years, or, if the debt is a verbal contract, two years.
Recovering international debt can present a variety of challenges, including language and time zone issues, which can make it difficult for businesses to tackle. In these situations, it is often a good idea to consider calling on the help of a professional debt collection agency. Our team of international debt collection experts can employ their knowledge of the rules on debt collection time limits in overseas jurisdictions to help you to recover your international debt quickly and efficiently.