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Check if you have to pay a debt

This advice applies to Scotland

You’ll be responsible for a debt if it’s something that the law says you have to pay, like council tax or an electricity bill.

You’ll also probably have to pay a debt if you’ve signed a contract to say you agree to give money to someone. This could be something like a:

  • credit agreement, for example if you’ve bought a washing machine or taken out a credit card
  • tenancy agreement, if you rent

If you’re responsible for a debt it’s called ‘being liable’. It means you’ll have a legal duty to pay it. If you’re not liable you should be able to challenge the creditor. A creditor is any person or organisation you owe money to.

Debts you’re not responsible for

You might not have to pay a debt if:

  • it's been five years or more since you made a payment or were in contact with the creditor
  • there was a problem when you signed the agreement, for example if you were pressured into signing it or the agreement wasn’t clear
  • the creditor didn’t check properly that you could afford the repayments when you signed the agreement

If you’re under 16 you can only be responsible for a debt if it’s for something you need day-to-day. This could include a mobile phone contract, clothes or food. If you’re under 16 and not sure if you’re liable for a debt, contact your nearest Citizens Advice.

Dealing with debts after someone dies

If you’re dealing with the debts of someone who has died, it’s important to follow the right process. If you don’t, you could be held liable for their debts. You're not automatically liable for the debts of someone who has died even if you were their husband, wife or civil partner, or living with them.

You could be liable for debts linked to the property you shared, for example council tax or a utility bill with both names on the account. If you had joint debts, you'll be liable for the full amount.

Read more about how to deal with the money issues of someone who has died on GOV.SCOT

Check if your debt is covered by Payment Protection Insurance

If you have a mortgage, loan or credit debt, you might have Payment Protection Insurance (PPI). If you do, the insurance company might cover your debt repayments if you fall ill, become unemployed or have an accident. Check your credit agreement or mortgage documents to see if you have PPI.

PPI will only cover your payments for a fixed amount of time. Your PPI policy will tell you what you’re covered for and how and when you should make a claim.

If you think you should be covered by PPI but the insurance company says you’re not, check if you can complain about mis-sold PPI.

Check if the time limit on a debt has passed

For most debts, if you’re liable your creditor has to take action against you within a certain time limit. Taking action means they send you court papers telling you they’re going to take you to court.

The time limit is sometimes called the prescription period. 

The time limit for most debts is 5 years. There have been a number of recent court cases about when the time limit starts to run from. For some debts the time limit may run from the date that you receive a termination notice. The time limit may restart if you write to your creditor or make a payment.

The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 5 years for the interest on the mortgage and 20 years on the main amount.

 If you’ve already been given a court order for a debt, the time limit for the creditor to enforce it is 20 years.

You shouldn't be taken to court to pay a debt after the time limit is up although some creditors may do so. After the time limit is up the debt is 'extinguished' but creditors may try to argue against this in court. 

Your debt could be extinguished if, during the time limit:

  • you (or if it’s a joint debt, anyone you owe the money with), haven’t made any payments towards the debt
  • you, or someone representing you, haven’t written to the creditor saying the debt’s yours
  • the creditor hasn’t gone to court for the debt

Check the date that you last made a payment to find out if your debt is within the time limit. If you know your debt is still well within the time limit and hasn't been extinguished because the time limit has run out, you should make sure you've collected information about all of your debts.

Contacting your creditors

If you need to check the details of a debt, you can phone your creditor. It’s important you don’t contact a creditor in writing if you think the debt might have extinguished because the time has run out. This includes sending a text or an email, or talking to them on webchat.

Writing to them could make it look like you’re agreeing you owe the money. This might reset the time limit - this means it will be another 5 years before the debt is extinguished because the time has run out.

If you’re not sure if your debt has extinguished, or you think your debt will soon be extinguished, contact your nearest Citizens Advice.

If you haven’t reached the time limit yet, making a payment to your creditor will always reset the time limit. Even if it’s just a small payment, or if someone else makes a payment on your behalf.

If your debt is in joint names

Check if the other person has admitted in writing that the debt is theirs and when they last made a payment.

The 5 year time limit is reset just for that person if one of you writes to the creditor. The time limit is reset for both of you if one of you makes a payment.

If the time limit has passed and your creditors are still contacting you

If you know your debt has been extinguished and run out of time, you can write to the creditor to stop them contacting you about it. Include a statement saying, ‘I don’t admit any liability for your claim’. Don’t say that you’re not sure what you owe, or that you think the amount is wrong. 

You can use National Debtline’s sample letter to write to your creditor. 

Ask the Post Office for free proof of postage - you might need to show when you sent the letter to your creditor.

You could also send the letter by recorded delivery - you’ll have to pay if you do this.

If your creditor still argues that the debt hasn't been extinguished, they’ll have to go to court to prove it. If your creditor sends you court papers for a debt you think has been extinguished, you should get help from your nearest Citizens Advice.

If a creditor keeps contacting you about a debt that has extinguished because it has run out of time after you’ve sent them the letter, you can complain to the creditor. If you’re not satisfied with their response, you can complain to the Financial Ombudsman.

Financial Ombudsman Service
Telephone: 0800 023 4567
Monday to Friday, 8am to 8pm
Saturday, 9am to 1pm

Calls are free from mobiles and landlines.

If you're sent court papers

If your creditor wants to start court action against you, you’ll get court papers in the post. It’s important you respond by the deadline written on the court papers.

If you get court papers for a debt you think has been extinguished, you need to explain this when you fill out the papers. Get help from your nearest Citizens Advice.

If you’re sent a court order

If a creditor has taken court action against you, you’ll get a court order in the post. If you did not challenge it, the court order will tell you to pay the money back to the creditor and explain how you should pay.

It might tell you to pay the whole amount straight away, or in monthly instalments. It’s important you keep to the terms of the order. If you can’t afford what the court has ordered you to pay, you might be able to ask the court for more time to pay the debt.

If the debt is for rent arrears in a private tenancy and the landlord has taken action to make you pay the arrears you will have to deal with the First-tier Tribunal (Housing and Property Chamber) not the sheriff court. Check what to do if you are a private sector tenant taken to the tribunal for rent arrears.

Checking and challenging debts

It’s important to check if you’re liable for a debt so you know if you should make arrangements to pay it back. How you check depends on what type of debt it is. 

If you don’t think you’re liable for a debt, you might be able to challenge it.

If you have council tax arrears

If you’re liable for a council tax bill and you’ve missed a payment it’s important you contact your local authority as soon as possible. Get more help with dealing with council tax arrears.

You’ll usually have to pay the council tax for the property you live in. It’s worth checking if the owner of the property is liable to pay, even if they don’t live there. For example, the owner will be liable if everyone living in the house is:

  • living in their own, separate parts of the building
  • there temporarily, for example in some hostels
  • an asylum seeker

If you live with other people, for example another tenant or a partner, you’ll usually be jointly liable for paying the council tax and any arrears.

If you're jointly liable, each person is responsible for the whole bill, not just part of it. This means if someone moves out without paying, you’ll still be liable for all of the bill. The council can ask any of the liable people to pay the full amount of the bill.

Challenging council tax arrears

You might be able to challenge a council tax bill if you:

  • don’t think you're liable for it
  • think the property is permanently exempt from council tax, for example if it’s a student halls of residence or armed forces accommodation
  • think the property is temporarily exempt, for example if it’s been left empty because it’s been repossessed, or someone has died or is in hospital

Find out more about who has to pay council tax and council tax exemptions. 

If you think you need to challenge a council tax bill you should contact your local council. You can check who your local council is on GOV.UK if you need to. 

If you’re not sure if you’re liable for a council tax bill, contact your nearest Citizens Advice.

If you have rent arrears

If you signed a tenancy agreement you'll be responsible for any rent arrears.

If you don’t have a tenancy agreement, you might have agreed with your landlord who was liable when you moved in. Check if you have any evidence of what was agreed - this could include emails, letters, text messages or records of payments in a rent book.

If you have rent arrears you should talk to your landlord as soon as possible. Pay what you can and ask for more time to pay the rent back. Your landlord could evict you if you don’t. Get more help with dealing with rent arrears.

If you haven't paid your gas or electricity bills

If you signed the contract with the gas or electricity company or requested the supply, you'll usually be responsible for paying the energy bill.

If you’re not sure, find out if you’re responsible for paying an energy bill.

To make sure you’re not being asked to pay too much, it’s worth checking that your bill is right.

If you haven’t had a bill recently

If you haven’t received a bill for over a year, you might not have to pay for all the energy you’ve used. Get help if you haven’t received an energy bill for a while.

If you've been contacted about a benefit or tax credit overpayment

You might have been told you’ve been overpaid because of a mistake, or because some information about you was wrong when the benefit decision was made.

Find out what to do if you’ve been told:

If you have mortgage arrears

If you signed the mortgage agreement you'll be liable for any mortgage arrears. If you signed the agreement with someone else you'll be jointly liable for any arrears.

If you know you’re going to miss a mortgage payment, you should talk to your mortgage company as soon as possible. You could lose your home if you miss mortgage repayments.

If you contact your mortgage company they might let you reduce your repayments or take a break from payments for a while. Speak to them as soon as you can to start dealing with mortgage arrears.

If your property was repossessed and you still have mortgage arrears 

Check the date the property was sold, and the date you last made a payment to the mortgage company.

Your mortgage company has to contact you within 5 years of the house being sold to ask you to repay any arrears. If they don’t, you might not have to pay. If you’ve been contacted about mortgage arrears from a property sold more than 5 years ago, you should contact your nearest Citizens Advice.

If you have a credit debt

If you signed a credit agreement you'll usually be responsible for paying back the credit debt. You’re not responsible for a debt if you’re not mentioned on the credit agreement or you didn’t sign the agreement.

Credit debt, or ‘borrowed money’, includes:

  • credit cards
  • bank loans and payday loans
  • overdrafts
  • store cards
  • goods bought on hire purchase

If you borrow money or goods this way, the law that protects your rights is called the Consumer Credit Act.

If a creditor hasn't contacted you about a credit debt within the 5 year time limit in Scotland they might not be able to force you to pay it back. They also can't force you to pay if there were problems with the original agreement, for example if they didn't include the right information about how the money would be paid back.

If you’re a guarantor for someone else

If you agreed to be a guarantor for someone else and they don’t make the payments, the creditor can ask you to make the payments.

If you’re a guarantor you should have a signed guarantee agreement that explains when you might be liable.

If you borrowed goods on hire purchase

If you’ve bought something on a hire purchase agreement, for example a car or a washing machine, you don’t own it until you’ve paid for it in full. If you fall behind with your payments the lender might be able to take back the goods.

You have the right to end the hire purchase agreement at any time, for example if you can no longer afford the payments. If you want to end the agreement early you should do this in writing. You can use our sample letter. 

If you end the agreement early you’ll be liable for half the amount you agreed to pay for the goods. The lender will take off the amount you’ve already paid them, but might add on extra costs for ending the agreement. 

If your lender says you have to pay more than half the whole amount you owe before you can end the agreement, you should contact your nearest Citizens Advice.

If you’re struggling to pay, it’s better to end the agreement yourself. If your lender ends the agreement you might have to pay extra costs. Whoever ends the agreement, you’ll have to give back the goods.

If you borrowed money with someone else

If you signed a credit agreement with someone else, you'll be jointly responsible for paying back the debt. If the other person stops paying, the creditor can make you pay the full amount of the debt, not just your share.

Challenging credit debts

There are laws to protect you when you borrow money. The creditor might not be able to take action to make you pay if: 

  • they didn’t give you a written agreement saying how much you were borrowing, how it should be repaid and your rights to cancel it
  • they didn’t check properly that you could afford the repayments 
  • they treated you unfairly, for example they sold you PPI when they shouldn’t have
  • they didn’t send you regular updates about your account and the amount you owe them
  • you didn’t borrow the money
  • you were pressured into signing the credit agreement or guarantor agreement
  • you couldn’t understand what you were signing
  • you were under 18 when you signed the agreement

Get help if you’re not liable for a credit debt

In these situations the debt might be ‘unenforceable’. This means the creditor might not be able to make you pay the debt. If you’re not sure, check your rights when borrowing money.

Get help from your nearest Citizens Advice if you think a credit debt might be unenforceable. 

You should also get help if a creditor keeps contacting you about a debt you think you’re not responsible for. 

If you’re not happy with how your creditor is dealing with your situation, you should contact them to complain. If you’re not satisfied with their response, you can complain to the Financial Ombudsman:

Financial Ombudsman Service
Telephone: 0800 023 4567
Monday to Friday, 8am to 8pm
Saturday, 9am to 1pm

Calls are free from mobiles and landlines.

If you've been contacted about child maintenance arrears

If you get a bill for child maintenance you should:

  • ask for a detailed statement and check this against what you think you’ve paid
  • check how much child maintenance you’re paying - use the child maintenance calculator on GOV.UK to check you’re paying the right amount
  • check if you’ve told the Child Maintenance Service (CMS) about any changes in your circumstances - this can affect the amount you should pay

If you think the amount is wrong, you might be able to appeal or ask for a review. You should contact the Child Maintenance Service. Check how to contact the CMS on GOV.UK

If you don’t pay your child maintenance the action that can be taken depends on the kind of arrangement you have. Check what to do if you owe child maintenance.

If your child maintenance arrears are because of payments you missed a long time ago, you might be able to get them written off. This will depend on what type of child maintenance agreement you had. You won’t be able to get the arrears written off if you should still be paying child maintenance.

If you think your child maintenance arrears are old and you’re not sure if you have to pay, get help from your nearest Citizens Advice.

Next steps

Work out which debts to deal with first

Check if you can increase your income 

Check if you can reduce your living costs

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