Statute barred debt

If your debt is statute barred, then too much time has passed for a lender to take you to court to recover the money you owe.

In England, Wales and Northern Ireland, most debts will become statute barred if there’s no contact between the lender and the person who owes money for six years.

This is called the limitation period.

The six-year limitation period usually starts from the date the creditor could first take legal action against you.

This is often when you miss a payment and the account defaults.

The limitation period can be reset if, during the six-year period, you: 

• make a payment towards the debt
• acknowledge the debt in writing

If the creditor takes court action and a judgment is made (such as a County Court Judgment), the debt cannot become statute barred.

The following types of debt can become statute barred:

• credit or store cards
• personal loans
• payday loans
• overdrafts
• catalogue debts
• gas and electricity arrears
• council tax arrears (in England and Wales)
• benefit overpayments
• rent arrears

That leaves some important exceptions you should be aware of.

For example, a county court judgment (CCJ) can’t become statute barred (although if the judgement is over six years old, the creditor may need the court’s permission to enforce the debt)

HMRC, meanwhile, can pursue unpaid income tax, VAT and capital gains tax indefinitely, and council tax can be enforced for 20 years.

If you’ve fallen behind on your mortgage and your property is repossessed or sold for less than the outstanding balance, the lender can chase the remaining capital debt (shortfall) for up to 12 years.

However, any unpaid interest is statute barred after six years.

If your debt is statute barred, then your debt still exists, but the lender can’t take legal action against you.

But if the debt is written off, that means the creditor has chosen to cancel the debt, or you’ve agreed to a formal debt solution to write off some or all of your debts, such as: 

• a debt relief order
• an individual voluntary arrangement (IVA)
• bankruptcy

We can advise you on debt solutions if you’re struggling with debt repayments and your debt isn’t statute barred.

You should also take a look at our handy on guide on when debt can be written off.

If you don’t know whether your debt might be statute barred, then you should see if any of the following have happened in the last six years:

• You’ve made payments towards the debt.
• You’ve acknowledged that you owe the money in writing.
• The lender has started court action.

You should also check: 

• your credit report
• bank statements
• letters from the creditor or court, as they’d be dated

If you have any questions about if a debt might be statute barred, contact us for debt advice.

If you’re contacted about a debt and you think the six-year limit has passed, then firstly, don’t ignore it.

Instead, write to the lender, refusing liability for the debt and insisting that you don’t intend to make any payments.

You can then explain that the debt has become statute barred, explain that you’ve paid no money or had contact with creditors for more than six years, and ask them to stop contacting you.

It might also be worth asking them to either provide evidence that the debt isn’t statute barred or confirm in writing that they won’t pursue you further for this debt.

Whatever you do, don’t make a payment or admit you owe them money, as this will restart the six-year limitation period.

And if you receive letters threatening legal action, make it clear in any responses that the debt is statute barred.

Again, we can advise you on how to deal with this situation.

A statute barred debt doesn’t automatically disappear from your credit report and can still appear on your file for six years from the date of default.

As a result, it could affect your ability to get credit in the future.