When an old debt becomes statute barred

England, Wales and Northern Ireland

Under the Limitation Act 1980 — and the equivalent Limitation (Northern Ireland) Order 1989 — a creditor has six years to start court action on most simple contract debts. Credit cards, personal loans, catalogue accounts, overdrafts, store cards and most utility arrears fall into this group.

The six years runs from the cause of action, which for most consumer credit is the date of default rather than the date you last used the account. If six years pass with no court claim issued, no payment made and no written acknowledgement from you, the debt becomes statute barred: it still exists, but the creditor cannot enforce it in court.

Two important exceptions. A mortgage shortfall carries twelve years for the principal sum. And a debt that has already been through the county court and become a CCJ does not become statute barred at all — a judgment stands, although a creditor generally needs the court’s permission to enforce one that is more than six years old.

Scotland

Scotland works differently and more favourably. Under the Prescription and Limitation (Scotland) Act 1973 most consumer debts prescribe after five years without payment, written acknowledgement or court action. And prescription in Scotland extinguishes the debt altogether, rather than merely making it unenforceable — which is a genuinely stronger position than the English rule.

What restarts the clock

This is where people lose the protection without realising.

• Making a payment, however small. A single £1 token payment resets the whole period.
• Acknowledging the debt in writing. A letter saying “I accept I owe this but cannot pay at present” restarts it. So can an email, and so can a signed form.
• Agreeing a payment arrangement, even one you never actually pay.

What does not restart it: a phone call in which you say nothing that amounts to an admission, asking the creditor to prove the debt, or simply receiving letters from them. Their writing to you has no effect on the clock at all.

If a debt might be statute barred, the safest correspondence is short and says only that you believe the debt is statute barred, that you are not making any admission, and that you do not intend to make payment. National Debtline publishes a free template for precisely this letter.

Debts these rules do not cover

Limitation does not apply in the same way to everything. Treat all of the following as outside it and take advice: council tax (which has its own recovery process through the magistrates’ court), magistrates’ court fines, income tax, VAT and National Insurance, most benefit and tax credit overpayments, student loans made under the modern arrangements, and child maintenance arrears.

Secured debts also work differently, and a lender’s right to possession of a property is not lost by the passage of time in the way an unsecured claim is.

Being chased for a statute barred debt

A creditor is not committing an offence by writing to you about a statute barred debt, and selling on very old debt books is routine. What they must not do is mislead you about it. Under FCA rules a firm should not continue to demand payment once you have said the debt is statute barred and it accepts you have not acknowledged it, and it must not threaten court action it knows it cannot take.

If letters continue after you have written, complain to the firm, then to the Financial Ombudsman Service. And if a claim form does arrive, do not ignore it — limitation is a defence you have to raise. Reply within the time limit stating that the claim is statute barred, and get free help from one of the services below before the deadline.

One more thing worth knowing: a debt being statute barred does not automatically remove it from your credit file. Defaults drop off six years after the default date regardless.

More guides on this site

• How to check whether a debt collection agency is genuine
• Making a debt collector prove the debt
• The company that owes you money has been dissolved

See all guides