When a debt becomes prescribed in Scotland

In Scotland, a debt can stop existing. If enough time passes without the creditor taking court action or you acknowledging the debt, it becomes prescribed: the debt is written off and no longer exists by law, and nothing more can be done to collect it¹. For most debts regulated by the Consumer Credit Act, such as credit cards, catalogues and payday loans, that period is five years².

Prescription is not the same as the rules elsewhere in the UK. In England, Wales and Northern Ireland a debt becomes statute barred, which stops the creditor enforcing it through the courts but does not wipe it out. In Scotland the debt is extinguished: it does not exist and creditors cannot recover it³. That difference matters if a debt collector is still writing to you, and it is why the sample letter for a prescribed debt is marked Scotland only⁴.

Not every debt follows the five-year clock. Council tax debt in Scotland has a 20-year prescription period, and so do DWP benefit overpayments⁵. Debts where the creditor already started action to obtain a decree cannot be prescribed at all¹.

Prescribed debt: a debt that can no longer be enforced

Prescribed debt is the Scottish term for debts that cannot be enforced because too much time has passed, which for most consumer credit debts means five years². The effect is stronger than in the rest of the UK. The debt is written off and no longer exists by law, and nothing more can be done to collect it¹. Independent guidance puts it plainly: in Scotland, the debt is "extinguished", meaning it does not exist and creditors cannot recover it³.

The Financial Conduct Authority's Consumer Credit sourcebook, which sets the rules for lenders and debt collectors, states the test:

Two things therefore stop the clock running in your favour: a relevant claim by the creditor, and acknowledgement of the debt by you or someone acting for you. If neither has happened within the period, the debt ceases to exist.

The five-year prescription period

For debts regulated by the Consumer Credit Act, the period is five years². The five years run from the point the creditor could first have sued for the full balance of the debt, and no payment can have been made by you, a third party or a joint account holder in that time⁴. In practice, that usually means five years from the last payment or the last time you acknowledged the debt in writing.

There is a second, longer limit sitting behind the first. Most debts in Scotland, including those covered by the five-year limit, are also covered by a 20-year limit⁹. The 20-year period is the backstop: it applies to debts that fall outside the five-year rule, and it is the period that governs council tax and benefit overpayments.

One exception is worth knowing. The Prescription and Limitation (Scotland) Act 1973 does not impose a period of prescription on an unfair relationship claim under section 140A of the Consumer Credit Act, or on a remedy awarded under section 140B⁴. If you are arguing that a credit agreement was unfair, the ordinary prescription clock does not apply to that claim.

Which debts can become prescribed, including council tax

The five-year rule covers most everyday consumer credit: credit cards, catalogue debts, payday loans and personal loans. Payday loans and housing benefit overpayments are among the types of debt that can be prescribed¹. Council tax is the big exception, and it is the one most people ask about.

Council tax is the clearest example of the two clocks. General guidance on council tax debt states that in Scotland debts are prescribed after five years, but the same guidance notes that council tax debts in Scotland are prescribed after 20 years⁸. Scottish Government guidance refers to "the 20 year prescription period for council tax in Scotland"⁷. The 20-year figure is the one that applies to council tax specifically.

Housing benefit overpayments follow the same pattern. The Prescription and Limitation (Scotland) Act 1973, updated by the Prescription (Scotland) Act 2018, sets out the rules, and the 20-year period applies¹¹. DWP benefit overpayments also have a 20-year recovery period, running from the date a final decision was made to recover the debt, and it continues even if you make payments or acknowledge the debt in writing⁶.

Payments made on a prescribed debt

A payment does not bring a prescribed debt back to life in Scotland, because the debt no longer exists. If you have made recent payments to a debt that had already prescribed, you can ask for your money back¹. That is a different position from the rest of the UK, where a payment can restart the clock.

The risk sits earlier in the process. If you write to a creditor about a debt that has not yet prescribed, this may restart the limitation period, depending on what you say¹². A letter that disputes the debt is not the same as a letter that acknowledges it, but the wording matters, and this is the point at which getting advice before you write is worth considering.

If a debt has already gone to court and a decree was granted, prescription does not undo it. A Scottish decree stays on your credit file for six years from the original judgment date, whether the balance has been paid or not¹³. The entry is removed only if you pay the debt off within one month of it being entered, or the decree is set aside or recalled by the court⁴. If you have paid the debt in full, you can get a letter of satisfaction from the pursuer or their solicitor and send it to Registry Trust Limited with their administration fee and confirmation of your name and address at the time of the decree¹⁴.

Prescription in Scotland and statute-barred debt elsewhere in the UK

The terminology differs because the law differs. In Scotland, this is called prescribed debt¹. In England, Wales and Northern Ireland, debts are statute barred after six years⁸. The Scottish rules come from the Prescription and Limitation (Scotland) Act 1973, which sets out how long a creditor has to take certain action against you to recover a debt⁹.

The practical difference is what happens to the debt itself. In Scotland, a statute barred debt ceases to exist and is no longer recoverable if a relevant claim has not been made during the limitation period and the debt has not been acknowledged by the customer during that period¹⁵. In England, Wales and Northern Ireland, the debt still exists; the creditor simply loses the court route to enforce it.

That is why the letters differ. The prescribed debt letter is marked Scotland only⁴. If you live in England, Wales or Northern Ireland, there are two other letters: one for disputing liability for a debt, and one for complaining to a debt collection agency that you do not owe the debt. Both are relevant in England, Wales and Scotland¹⁶.

When a debt has not prescribed: bankruptcy and other options

If a debt has not prescribed, or will not for years, Scotland has its own set of debt solutions. Official guidance lists them as an informal agreement, the Debt Arrangement Scheme (DAS), a protected trust deed or bankruptcy¹⁸. Bankruptcy is often referred to as sequestration in Scotland, and both terms mean the same thing¹⁹.

A Debt Arrangement Scheme is a debt payment programme administered under the Debt Arrangement Scheme (Scotland) Regulations 2011²⁰. A trust deed or debt payment plan in Scotland stops interest and charges²¹. Bankruptcy in Scotland can discharge your debts after as little as six months, though the full process can last four years or longer²².

Before any of that, there is a step that costs nothing. Debt advice and support is available at any time, even if the court has already ordered you to pay the money²⁵. A moratorium period, which gives you breathing space from creditors, is available only if you have received debt advice and are considering a debt solution such as bankruptcy or a trust deed²⁶.

If a creditor is pursuing you through the courts, a Charge for Payment applies to debts of £5,000 or more and gives you 14 days to pay²⁷. You may be able to stop further action by contacting the company or person you owe money and coming to an arrangement, or by making a payment directly to the sheriff officer towards the debt, and you have the right to do this while the sheriff officer is there²⁹. Asking the court for Time to Pay is a Scottish procedure³⁰.

Where a debt has already been dealt with through bankruptcy, the rules limit what creditors can do. Firms should not take steps to enforce a debt where the customer is subject to a bankruptcy order (or sequestration in Scotland), a debt relief order, an individual voluntary arrangement, or in Scotland a protected trust deed or Debt Arrangement Scheme³¹. If a creditor is still chasing you after bankruptcy, free advice is available from Citizens Advice³².