An Acknowledgement of Debt is simple letter of confirmation by a debtor to a creditor of an outstanding debt for a fixed amount owing to the creditor.
Creditors are required, by law (The Limitation Act 1980) to take action to recover outstanding debts within 6 years of them becoming due. After 6 years creditors cannot start legal proceedings to recover the debt. If, however, the debtor acknowledges their legal responsibility by signing an Acknowledgement of Debt, then the creditor has 6 years from the date of signing in which to pursue the debtor for payment.
An Acknowledgement of Debt letter, therefore, is an instrument that affirms a debtors legal responsibility to repay a debt.
This Acknowledgement of Debt is suitable for use in England, Scotland and Wales. The form allows inclusion of details:
- amount of debt.