A debt may be statute barred (too old to pursue) because the Limitations of Actions Act 1958 (Vic) places a limit on the time a creditor has to take legal action to recover a debt. There are a number of reasons for having a time limit on a creditor taking legal action, including: As time goes by, relevant evidence is likely to be lost; It is oppressive, even “cruel”, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed.
If a creditor starts court action against you, and the debt is statute barred, you will have a complete defense to the action. If you tell a creditor that you believe a debt is statute barred, the creditor will be unlikely to start any court action against you.
The Privacy (Credit Reporting) Code 2014 a credit reporting body must, upon request, remove default information that relates to a statute-barred debt.
6 year limitation period
For most debts, a creditor must begin court action to recover the debt within 6 years of the date: That you last made a payment or that you admitted in writing that you owed the debt. The limitation period starts from the latest event in the above list.
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