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If you owe money to any person or company, they have the right to try
to recover the money from you. However, there are time limitations that
apply to recovery to make sure that the process is fair to you.
Legal action to recover a debt can be commenced at any time within
six years from when the debt becomes due. For some
debts the six years starts from the time the debt is incurred and for
other debts the six years starts at a later time so make sure you
check with a lawyer before refusing to pay an old debt. If payments
are made or the person who owes it acknowledges the debt in writing
during the six year period, the six years starts again from the time
of the payment or acknowledgement.
If you have "confirmed" the debt, either by admitting that you owe the money or making a payment, the time limit
starts from the date of the confirmation. So, for example, every time you make a payment on a loan you are starting the six
year limitation period again.If you have a debt which is "out of time", you should seek legal advice about whether
or not you still have to pay the money back.
If the person you owe money to starts legal action against you to recover this money from you after the six year period has
expired, you should get legal advice straight away.
Produced by Redfern Legal Centre.
This factsheet is no substitute for legal advice. If you have a problem
please seek legal advice from your local community legal centre
Last updated January 2006