Statute barred debt. What it means, whether it applies to you, and what to do next

You might have come across the phrase "statute barred" while looking into an old debt. But what does it actually mean and does it affect you?

What does statute barred mean?

In England and Wales, most debts have a time limit on them.

If a creditor has not taken you to court over a debt, and you have not made a payment or admitted the debt in writing for six years, that debt becomes statute barred.

A statute barred debt does not disappear. But a creditor can no longer take you to court to make you pay it.

In Scotland the time limit is five years. In Northern Ireland it is six years.

What kinds of debt can become statute barred?

Most personal debts can become statute barred. That includes credit cards, personal loans, payday loans, overdrafts and catalogues.

Some debts have longer or more complicated rules.

If a creditor has already taken court action and obtained a County Court Judgment (CCJ), the debt will not become statute barred. The creditor may need permission from the court to enforce a CCJ that is more than six years old, but the debt itself does not become statute barred.

Mortgage shortfalls have a longer time limit of twelve years, so they take much longer before they become statute barred.

Council tax debt is complicated. If your local council has already got a court order to collect the money, different rules may apply. If council tax is involved, always get advice first.

Debts owed to HMRC, which is the government department that collects tax, also have different rules in many cases.

If you are not sure what kind of debt you have, get advice before you do anything.

"The lender may need to get permission from the court to chase the debt if the CCJ is over six years old, but it won’t become statute barred."

When does the six years start?

In most cases, the six years starts from the date you last made a payment or the date you last told the creditor in writing that you owed the money.

This matters a lot. If you make even a small payment toward an old debt, or write to a creditor saying you owe the money, the six years starts again from scratch.

That is why it is worth getting advice before you contact an old creditor or make any payment on a debt you think might be statute barred.

How do I know if my debt is statute barred?

You will need to work out when you last made a payment or told the creditor in writing that you owed the money.

Check old bank statements if you have them. You can also ask the creditor for a record showing the date of your last payment. Most creditors are required to give you this information if you ask, depending on the type of debt.

If you are not sure, we can help you work it out.

What if a debt collector contacts me about an old debt?

Debt collectors sometimes chase old debts, including ones that might be statute barred.

If you think a debt might be statute barred, do not make a payment and do not tell the creditor in writing that you owe the money before getting advice. Either of those things could start the six years again and mean the creditor can take you to court.

You are allowed to tell a creditor you think the debt is statute barred. They are not allowed to threaten to take you to court over a debt they know is statute barred. If a debt collector does this, you can report them to the Financial Conduct Authority, which is the organisation that regulates debt collectors, or make a complaint to the Financial Ombudsman Service, which handles complaints about financial firms.

Does statute barred debt affect my credit file?

A debt will usually be removed from your credit file six years after the date it was first recorded as unpaid, whether it is statute barred or not.

So by the time a debt becomes statute barred, it may already have gone from your credit record. But not always. It depends on when it was first recorded.

If you are not sure whether a debt was ever recorded against you, you can check your credit file for free through Experian, Equifax or TransUnion.

What should I do next?

If you think you might have a statute barred debt, the most important thing is to get advice before you do anything.

Making a payment or sending the wrong kind of message to a creditor could start the clock again and leave you back at square one.

We can help you work out where you stand and what your options are.