If you have an old debt, you may wonder if you still have to pay it? Can your creditors really take you to court after this long?
English law says a creditor only has a limited amount of time – typically six years – to take you to court. The term for a debt that is so old that it can’t be enforced in court is “statute barred”.
(You may have heard the phrase being time-barred, that means the same thing. Sometimes it is called status barred because the term statute-barred has been misheard.)
This article answers the most common questions people have about statute-barred debt, including when the six-year period begins.
If you are making payments the debt will never become statute barred no matter how old it gets. For you this article isn’t relevant, instead read Can I stop paying this old debt?
Contents
New rules for some debts – January 2019
In January 2019 there was a decision in the Court of Appeal (Doyle v PRA) that has changed the point at which the six-year period starts for some debts including credit cards and loans.
I have updated this article to reflect this.
This may lead to a lot of confusion for a while, with articles and comments on the internet describing the old position. If you are not sure what to believe or whether this affects you, talk to National Debtline on 0808 808 4000.
What is “statute barred” – an overview
Creditors have to take legal action about debts within certain times which are set out in the Limitations Act 1980. For most sorts of debts and bills in England and Wales this time is six years.
If the creditor doesn’t start court action within this time, the debt is not enforceable because it is “statute-barred”. When a debt is statute-barred it still exists legally, but because you cannot be taken to court for it, you do not have to make any payments to it.
This six-year period begins when the creditor has a cause of action – this is the point at which the creditor could go to court for the debt.
If you are making the normal monthly payments to a debt, you can’t be taken to court for it. It is only when you have missed payments and the creditor can go to court that the 6-year period starts.
Think of a timer that runs for 6 years – which can be reset
A good way to think of statute barring is that there is a 6 year timer. This is set running when the creditor has a cause of action. The sand takes 6 years to drain slowly through… at the end, your debt is statute barred.
But if you make a payment to the debt or acknowledge it in writing during the six years, the clock is reset back to start at 6 years again. So if you are making monthly payments, even tiny ones, a debt will never become statute barred as the clock resets back to 6 years every month.
What is a cause of action?
I try to avoid using legal jargon, but this point is so important that I have to talk about it.
Someone can’t sue you for a debt unless they have a good reason to – this is their cause of action. What that good reason is depends on the type of debt, how it is regulated and, sometimes, what the contract for the debt says.
This has always be complicated for some debts such as overdrafts which don’t have regular payments. You may have stopped using your overdraft 8 years ago, but your bank may not have realised this for a long while – so when would they have the right to sue you?
The January 2019 court judgment decided that a creditor’s cause of action does not start for some credit debts (including some loans and credit cards) until the creditor has sent you a Default Notice. The problem here is that you may not remember when you got that or if one was ever sent. Also the creditor can just delay sending you this so your debt may never become statute barred.
How can I tell if my debt is statute-barred?
Unsecured debts, including most loans, credit cards, catalogues and overdrafts will normally be statute-barred in England and Wales if you can say YES to all the following four points:
- it had been more than six years since you last made a payment; and
- the creditor has a cause of action more than six years ago; and
- you haven’t acknowledged the debt in writing during this time; and
- the creditor hasn’t already gone to court for a CCJ.
With a joint loan, it matters if either of you makes a payment. If you have split-up, you may think a debt is statute-barred but it isn’t because your ex has made a payment to it in the last 6 years.
Acknowledging the debt has to be in writing. If you haven’t done this, it doesn’t matter if the creditor has written to you, or you have discussed the debt on the phone – this won’t stop the debt being statute barred. If you have reclaimed PPI, this is likely to have acknowledged the debt.
The cause of action is the most difficult point to determine here. See this National Debtline factsheet which has a section on When Does the Limitation Period Start Running?
If you can say Yes to points (1), (3) and (4) but are unsure about point (2) on the cause of action, I suggest you call National Debtline on 0808 808 4000 and talk through your situation with them.
Sometimes the exact date a debt becomes statute barred matters:
- if you write saying that a debt is statute-barred and you are wrong because the debt isn’t, then your letter is likely to have “reset the clock” by acknowledging the debt;
- if you have received a court form about a debt, you need to know whether you can defend the case on the grounds the debt is statute barred.
Questions about different sorts of debt
Statute barring for secured debt – mortgage shortfalls
If your debt is still secured – you are still living in the house there is a mortgage or a secured loan on – then statute barring isn’t relevant. What matters is if you get too far into arrears the lender can go to court to repossess your house.
But what about when the house has been sold so the security no longer exists but you still owe money on the debts?
For a debt resulting from a mortgage shortfall, the time allowed in the Limitations Act is twelve years. But many lenders follow the old Council for Mortgage Lenders code, now part of the MCOB Rules (Mortgage Conduct of Business), that says:
anyone whose property was taken into possession and sold more than six years ago, and who has not been contacted by their lender for recovery of the outstanding debt, will not now be asked to pay the shortfall.
See National Debtline’s Factsheet on Mortgage Shortfalls for more details, such as what does “contact” mean? And phone National Debtline if you are contacted about a mortgage shortfall debt which is between 6 and 12 years old.
Do tax debts or benefit overpayments become statute barred?
Tax debts such as Income tax and VAT do not become statute barred. If you are wondering if your debt is a “tax debt”, HMRC has a list of “not tax debts”, which do become statute barred.
The situation regarding benefit overpayments is more complicated – although they can become statute-barred, there are other ways the debt could still be recovered. You should take advice about these sorts of debts – contact National Debtline or your local Citizens Advice are very good with benefit issues.
What about old council tax arrears?
A council should not go to court and ask for a liability order for council tax arrears more than six years after the council tax became due. But if the council already has a Liability Order, this will never become time-barred.
If you get a letter out of the blue about a Liability Order for council tax arrears from ten years ago, this may feel very unreasonable. One of the main reasons time limits exist is that people don’t keep paperwork forever, so you may have no way of proving that you paid the debt at the time. This is one of the rare occasions when it may be worth asking the creditor to Write-off the Debt. It may also be worth getting a local councillor involved for council tax arrears.
What about utilities?
Gas, electricity and water bills become statute barred 6 years after the date on the bill. There are also rules regulating when a supplier can “back bill” – send a new bill for charges more than 12 months old. If you think you have a problem with back billing, go to your local Citizens Advice and ask for their help.
Getting letters and court forms about a debt you think is statute barred
Can I ignore a letter about a statute barred debt?
Are you 100% sure that it is statute barred? If you aren’t certain talk to National Debtline.
If you are do not recognise the debt you should probably write a “Prove It” letter to your creditor. This is worded so that it doesn’t acknowledge the debt.
If you do recognise the debt but you are certain it is statute-barred, you could ignore a letter. But it might be less stressful to reply pointing out that it is statute-barred rather than get more letters and possibly court forms. National Debtline has a template letter you can use here.
Can I ignore a Letter Before Action/Claim about a statute barred debt?
This is a bad idea. It is much easier to challenge a creditor by saying the debt is statute barred using the Reply Form than it is to defend a court case.
See How to reply to a Letter before Action which looks at what you should do when you think the debt is statute barred.
I have been sent a Claim Form for a statute barred debt – what should I do?
Do NOT ignore the Claim Form. If you do, a judgment will be made against you in default because you haven’t replied, even if your debt is statute barred.
So if the creditor takes you to court, you must defend the claim on the grounds that it is statute-barred. And also look at whether you have any other defences eg can the creditor produce the CCA agreement.
If you are unsure what to write on the defence form, phone National Debtline and talk to them.
Other FAQs about statute barred debt
I live in Scotland
This article isn’t relevant if you live in Scotland where the laws and time limits are very different. I suggest you phone National Debtline who have Scottish experts.
My debt is statute barred, do I still owe the money?
Yes. Your debt still exists, it hasn’t been written off, it can still get sold on and you may still receive letters about it.
The Financial Conduct Authority’s rules about statute-barred consumer credit debt (loans, credit cards etc) are here. They say that if you state you will not pay a statute barred debt, the creditor cannot continue to ask you to pay it.
If you want to get rid of the debt completely and you are absolutely sure a debt is statute-barred, you could consider making a very low Full and Final Settlement offer, perhaps under 10% – see Full & Final Settlements for more details. Your letter should point out that the debt is statute barred and hence unenforceable.
A debt has dropped off my credit record – is it statute barred?
Possibly not! Obviously your debt is old but it may not be statute barred.
The six-year period for the Statute of Limitations is NOT the same as the six-year period that a debt stays on your credit file after a default. If a debt isn’t showing on your credit file it may be statute barred but it may not be.
A debt will stop showing on your credit record six years after any default was recorded. But if you have made some payments to it in the last 6 years, perhaps just a token £1 a month, then it isn’t going to be statute barred.
My debt has been sold, does this effect becoming statute barred?
No, it doesn’t matter if your debt is sold. The six-year period still runs from the date of your last payment or written acknowledgement of the debt.
The sale doesn’t “reset the clock”. If it was already statute-barred at the time it was sold, it remains statute barred.
When does a CCJ become statute barred?
It never does. But if the creditor hasn’t taken any enforcement action in six years, they will need to apply to the court for permission if they want to enforce the debt by using bailiffs. This is unusual but if it happens to you, contact National Debtline.
My debt is statute-barred – if I reclaim PPI will this re-open the debt?
Once a debt is statute barred this is permanent, it can never become “unbarred” so applying for a PPI reclaim won’t change this. So it’s safe to reclaim PPI on a statute barred debt.
But if the reclaim is successful, the lender will sometimes not send you the money but set it off against the remaining debt – even though it is statute barred the debt still exists. In this situation don’t use a claims company, or you could end up owing them money.
Any other questions?
I can’t give you advice on whether your debt is likely to be statute barred, so if you are concerned about a specific debt, then phone National Debtline on 0808 808 4000. Or you could use their good web chat.
But if you have a general question about statute barred debt, ask it in the comments below.
Updated 2019 for the new court judgment
why pay a debt that isn’t on your credit record
What to do if you receive a court form
Is this default date for a debt wrong?
Claudia says
Hi , I’ve been paying collection agencies for debt that spans back over 12 years , the amount I’ve paid (which is actually a lot) hasn’t reduced my balances infact some have gone up loads . They don’t show on my credit report . Can I just stop paying them??
Sara (Debt Camel) says
what sort of debts were these? which have been going up? who are the debt collectors?
Ian Maskell says
I have a debt with Ferratum which is now over 6 years old. I have not acknowledged the debt during this period. I’m relatively sure it is now statute barred but my question is in regard to the credit reference ageny. They never actually defaulted the loan even after all this time. If it is statute barred should it be removed? Or does it stay on my record forever?
Sara (Debt Camel) says
when did you take the loan and have you made any payments to it?
Ian Maskell says
Hi Sara.
The loan was taken out in March 2014 and I have made no payments to it.
Sara (Debt Camel) says
the debt will stay on your credit record for 6 years after a default date or 6 years after it is settled. Being statute barred is not one of the criteria – although obviously most statute barred debts have defaulted.
if you want it gone, you have to ask Ferratum to add a default date. That would normally be 3-6 months after you missed a payment.
But you may not want to poke ferratum awake by asking them this at the moment. the longer you leave it the easier it is to argue that it is statute barred. If you never received a Default Notice this is not straightforward.
Ian says
Thanks Sara
I don’t mind actually repaying them the principle loaned. I was in a right state at the time financially. Do you think it is worth offering this in a without prjudice Full and final settlement email in return for deletion from my credit file?
Sara (Debt Camel) says
I don’t know if they would be likely to agree to that.
Ian Maskell says
Fair enough. I guess I’ll just wait or send a data request to see if there is an actual Deafult issued.
Colin says
I had an overdraft with RBS – which was within their approved limit – for £4500. In 2014 I lost my job and was notified by RBS that’s they were cancelling my overdraft and wanted immediate payment of it. They have since passed the debt to a number of collection agencies, each of whom I have not contacted and have made no payments to. Can they now enforce this or is it statute barred ?
Sara (Debt Camel) says
what date did RBS tell you they wanted immediate payments? Did they ever issue you with a Default Notice, if so, what date? Is there a default on your credit record, if soo what date?
Jake says
Hi Sara,
I had to leave the Uk unexpectedly as my student visa ran out. I had an overdraft of £200 with Barclays and also a mobile contract.
Upon return to the Uk 2 years later, I went to the bank to reinstate my old account and I was told it was closed and that they didn’t have any information. A few months later I saw on my Transunion credit file that a default had been registered in 2015. I have not contacted them about this till date.
The phone company sold the debt which would be the remaining term of my contract to a debt collection agency – to be honest I was really confused as I was unaware of any debt, so I used the prove it letter, they sent me the phone records but I have refused to engage them ever since then. The default was registered late 2014.
I just really need advice as I believe these two defaults are affecting my credit score. Barclays never chased up the money and in most cases when I tried to remind them of my account details can’t see much details apart from the fact that it is a closed account.
The debt agency the phone company sold this to keep sending me offers but I believe I haven’t received anything for the past 6 months.
Should this come off my credit file anytime soon ?
Sara (Debt Camel) says
Defaults drop off your credit record 6 years after the default date on the credit record.
But of course the debt collector may decide to go to court for a CCJ, which would then be on your credit record for another 6 years. If they make you a good offer to settle, accepting it might be a good idea.
Jake says
Thank you Sara,
I don’t agree that I owe the bill stated from the phone company and when I did reach out to them, they couldn’t give any further information because they had closed the account and sold it to a debt agency.
If I settle to get them off my case, would this still not remain for another 6 years ?
Sara (Debt Camel) says
have you taken the complaint to the relevant Ombudsman?
James says
I have a student loan debt from 1997 that was sold to a DCA around 2015. I haven’t made a payment or acknowledged the debt since the early ’00s, but the DCA slapped a default on in 2017 and say that the cause of action’ began then. Does a debt have to be in default before a cause of action begins?
Sara (Debt Camel) says
An old-style student loan debt – I suggest you talk to National Debtline on 0808 808 4000 about this.
Joel says
I am from Venezuela. Back in 2014 I enrolled in a post graduate program in England. In 7 june 2014 I made the first and only payment to my tuition fees.
To pay the rest I was waiting for the goverment to approve my request to exchnage venezuelan currency into pounds (in Venezuela you need goverment permission to do this kind of Transaction.)
[edited]
Sara (Debt Camel) says
Hi Joeal, your two comments were very long and complicated. You need someone to talk to you about the details of your cases, that person is not me.
I suggest you phone National Debtline – they can be phoned from outside the UK https://www.nationaldebtline.org/EW/information/abroad/Pages/living-outside-the-uk.aspx
Joel says
Hey! Thanks anyway.
I think I might just tell the university about my current situation, with my employer putting my contract on hold and everything, and see if they can wait until lockdown is lift here to resume discussion.
Thanks again.
George says
Hi Sara,
I have an old debt from 2010-2011 that I did not realise was outstanding to virgin media. As I am looking to buy a house I recently signed up to credit references agency’s and this is where I realised this debt was outstanding.
The amount is small, however although payments could not be taken in mid 2010 this debt seems to have never been defaulted. Therefore it has remained on my credit report as an account in arrears and missing payments which date every month until June 2020 (current).
My question is what recourse do I have for this, as surely almost 10years later this should not still be being reported on my credit file and adversely affecting it?
I can pay this amount, however I would like removal of this from my credit rating as it is something I was unaware of, and being almost 10 years old now surely should not still be recorded on my credit file, thought these issues usually only stay on the file for up to 6years.
Any information you can provide would really be appreciated.
Thanks
Sara (Debt Camel) says
Have you carried on using the Virgin account? If not, when did you stop?
George says
Please could you delete my surname and sorry for multiple posts.
George says
Hi Sara,
I have an outstanding debt from 2010 that I was unaware of until I recently looked at my credit file because we are looking to get a mortgage.
The account in arrears is not for a lot of money and I am able to repay this at any time, however the last contact I had regarding this debt was in 2011 and I’ve had nothing
since (I have moved house etc but email has never changed)
It appears this debt was never defaulted and has remained as an account in arrears and missed payments every month since 2010, but I was completely unaware.
Do I have any recourse for dealing with this, it’s almost 10 years old but is still on my credit account as missing a payment every month.
Can you please advise, thanks ever so much
Sara (Debt Camel) says
what sort of debt was this and who was the lender?
George says
Hi Sara,
It was for broadband with virgin media.
Apparently I didn’t finish the contract and payments were not completed in 2010
Sara (Debt Camel) says
so what happened? Did you move house? Did you ever get letters from them?
George says
I actually moved out of the apartment that this account was connected with. The last correspondence I can find relating to this is an email dated 05/06/2011 requesting the payment. Other than this, which I must have missed at the time I have received no phone call, letters, or notifications of default. I was completely unaware that this outstanding debt still existed until yesterday when I got hold of a credit report from a specific agency.
Is the any legal requirement for a lender to go through the default process by a certain point, or is this date up to them? After doing some reading I’m under the impression most outstanding debts are defaulted after a period of 3-6months. This is not the case with mine and these missed payments have just remained in arrears
Marie says
I bought a TV of Bennet’s 2007 it broke after nine months they took t back for repairs gave me a second hand courtesy TV I rang after two weeks the shop had ceased trading heard nothing for 10yrs untill now they sold the debt and asking me for 2.996now s this debt statuer bard they say the new company have had a ccj against me and a charging order how can this happen after 10yrs ineed advice what to do they say if I pay 2396 in90days it will be ok why pay for a TV that I don’t have my name
Sara (Debt Camel) says
I have deleted all your personal information – I cannot look into this for you.
You can phone National Debtline on 0808 808 4000 – they are open on Saturday morning.
Or you can contact your local Citizens Advice and ask for their help to look into this.
Joseph says
I received a ccj in September 2017 in my absence for a credit card debt from 2011. My last payment was around May 2011.
This would mean that the ccj was given against me over 6 years of the limitation periodit would be 6 years and four months after my last payment.
Would this be a defence to have it set aside?
I have had no contact with anyone during this period.
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 about this.
Francis Smith says
A UK company has debt, which has been contractually secured on real estate owned by the UK company.
The creditor/lender has never chased for the debt and no payment has been made.
There is no correspondence with the lender.
Would disclosing the debt as a liability in the financial statements (publicly available on the UK company register) be considered to be an acknowledgement it in writing, which could be used by the creditor to avoid the debt becoming statute barred?
Another way of asking the question is whether including the debt has a liability in the financial statements of the debtor company means that the debt can never be time-barred?
Sara (Debt Camel) says
Sorry but I cover personal debt here. I suggest you ask your solicitor.