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?
Dave says
I see want you mean about crossing the fingers, The proscribed way would be to use a third party and find a reasonable way to pay off the debt.
But if the SB date had long gone and they continue to chase, they are not going to stop there is money to be made or remade! the only course of action is to be taken to court, and then it is at that point a date that can be proved as the last contact and then taken into account.
Sara (Debt Camel) says
But a letter doesnt prove it is the last contact – if they are going to assert there is more recent contact, a letter doesnt disprove that.
Seriously, this is not a plan you should have any expectation of working. If you are going to contact your creditors, you should expect them to reply, not ignore you.
katherine says
Hi Sarah
I wason here few months ago (september – ish) . Last time I replied I updated to say that id sent the cca request but not received anything. I didnt follow up, I left it to see if they came back with anything. They hadnt, until today when i received a Notice of Sums in Arrears. What is this? Am i right in thinking this isnt the cca i asked for? theres nothing on it really only the amount owed and covers period of 12/05/19 – 21/11/21. i assume this is when they took it on?
There is no mention of my last letter to them. Looks like a standard automated type letter. There is nothing else. What should I do? Do I contact them? Or would I be best contacting the orginal creditor or would that be poking the sleeping bear?
Sara (Debt Camel) says
It is a standard letter to say your account is in arrears. It has nothing to do with your request for a copy of the CCA agreement.
Have you ever had anything acknowledging you have asked for the CCA?
KATHERINE says
Nope. Not a sausage. I was feeling quite anxious as was thinking is this them gearing up to start ccj proceedings.
Sara (Debt Camel) says
no, this is a standard letter. BUT you need to follow up and ask why you have not had a reply to your request for the CCA. Did you enclose a cheque? Was it cashed?
KATHERINE says
I did and they promptly returned payment saying it was not needed.
Sara (Debt Camel) says
ok, that’s good. Then ask them why they have not replied to your request.
KATHERINE says
Ok. So that one today is absolutely separate from what I asked for?
Sara (Debt Camel) says
Yes
KATHERINE says
Ok. Can I clarify then, for this to be enforceable they still need to provide the cca?
Sara (Debt Camel) says
yes,
But you need to find out what is happening.
KATHERINE says
Thats my next step yes. Just wanted to be sure in case they chance it and issue something. So ideally I now need them to confirm they dont have it and therefore not enforceable. At least buy me some time while i make other enquiries.
Stephen says
Hi. Great article thank you.
I have received a court claim form for a debt.
I was going to set up a payment plan with the company but realised the date they give on the claim form for the default notice balanced against the date on the claim form makes the debt statute barred.
Can I stop it being heard in court based on this information?
Thanks
Sara (Debt Camel) says
You would have to submit a defence to the claim.
What sort of debt was this?
Stephen says
Credit card from 2008. Default notice 2014.
Have submitted my defence based on it being statute barred. Was wishful thinking on my part that it simply couldn’t be heard in court then.
Seemed odd that the claimant would provide me with a signed legal document that helps me. Unless they have become too used to people never responding or turning up to court?
Waiting for their documents to arrive for the next step.
Sara (Debt Camel) says
did you make any payments after the Default Notice?
Stephen says
Hi Sara.
The last payment made by myself was on the 6/22014
However the debt company is citing a payment made in 2017 but this has a – next to the figure which surely is not a payment to the account?
The transaction log I have states
Posting category code: PAY
Transaction type code: 103
Description: payment from FDR
Amount: -57.82
I went into branch but they said they didn’t know what the code was or who/what fdr is as “it was a long time ago and the codes and abbreviations have changed”
Under the transaction I’ve laid out above is another from “legal&trade” again with – next to the figure
I’m more confused than ever. All I can find on the internet for three number transaction codes is that they are internal.
So do these count as payments to the account? Or is it just MY last payment to the account that counts for the statute timer?
Sorry for the essay
Sara (Debt Camel) says
You are sure you did not make that payment – have you looked at your bank ststement for that month?
Did you make any PPI reclaim or anything like that?
If not, then I suggest you reply that you did not make that payment and you would like them to explain who the payment was from as you have no idea.
Stephen says
Thanks for the reply. No, no ppi and It would show up as a normal payment with an 8 digit payment code. Not a 3 digit transaction code…..
To be honest I’m not sure it is a payment to the account as it has a – (minus symbol) next to the amount. Looking through the statements everything with a minus is interest or fees. My payments have a + next to the amount I’ve paid in/ off.
Can you confirm if it is a payment from ME that would reset the statute timer or any payment?
If Lloyds can’t tell me what or who it is I can’t see the claimant knowing what or who fdr is…..
Sara (Debt Camel) says
if it has a negative by it, it sounds like a charge, not a payment.
So far as I know, only a payment by you or by someone you have authorised to credit the account, would reset the statute barred time. You can talk to National Debtine on 0808 808 4000 about this – but if this isn’t a credit it seems simpler to point that out!
Stephen says
Doubtful as I wasn’t in the same country with the card. Which is why the Account defaulted in the first place. Reading through your article I’m glad I had forgotten about it or I’d probably have claimed the ppi and potentially reset the statute ‘timer’.
Wasted an hour today on telephone banking but as address has changed and the account has been sold the person at the other end couldn’t help at all.
I’m due into the local branch tomorrow to hopefully find out what happened and when. Will update when I have more info
Cara Killey says
Hi, I have just found your page, and thankgod it makes some sense, can I just clarify something, I received a card through my door, stating for a call back. I called back and spoke to Resolvecall working on behalf of Arrowglobal – on speaking to them they said It was for £500 for a catalogue company called Kays back in 2006 16 years ago ciitzens advice never pick up, so is this right, after 6 years the debt is passed, I haven’t heard from them in all this time, am I riught in thinking as the account was sold to who ever after the 6 years, it would be statute barred , and that I dont have to pay them. I actually cant believe after 16 years out of the blue, I got this, not once did i ever get any letters or anything I told them I would be phoning back on monday ~ any help would be greatly appreciated
Cara
Sara (Debt Camel) says
If you are sure you have never paid them since 2006, I suggest you tell them that you have no records of such an old debt and if you owe it, it is stature barred. If you talk to National Debtline on 0808 808 4000, they have a template letter you can send or email.
If they perist, then you can also ask them to produce the CCA agreement for the debt and a statement of the account, see https://debtcamel.co.uk/ask-cca-agreement-for-debt/. But with such an old debt, just saying it is stateute barred will often resolve the problem.
Cara Killey says
Hi Sara, Thank you so much for putting my mind at ease, when I spoke to the bloke, he was saying in scotland they have a limit, I said we are not in Scotland and I wont be paying you a penny, and I will call back, didn’t give him any time to start. lol I will be saying this on Monday.
Thanks Cara – will let you know what they say
Cara Killey says
Hi Sara, So I phoned them this afternoon,and told them i didn’t remember the account, and also said i had spoken to Citzens advice and other debt agencies, and said that account would be Stature barred. The response i got was Ooo lol, he said yes i know, he said we give customers the chance to pay it, and he said he will send that back to the original company. So yes thats that done with, but I do think alot of people wouldn’t think to investigate matters. Thanks Sara for this website, it has certainly saved me countless sleepless nights. Cara
Claire says
Fantastic x
Pawel says
Hi. I had a car from Welcome Finance in 2007. About 2 years later, I lost my job and couldn’t afford the payments and asked them to take the car back but they refused. I paid token payments. They never repossessed the car. The car (a 2003 model) rotted on the car park because I didn’t use it. They still never took the car back. Welcome then went bust, and a company called IND took over, got a CCJ on me which has since dropped off my file. I was paying 40 a month to them up until May 2016. Since then, I heard nothing. No letters, no calls. Now this month, I get a letter from Intrum saying I owe money. This debt is due to be SB in May of this year. I don’t believe I should pay this any longer because of the aforementioned way Welcome treated me with not repossessing the car. What steps should I take?
Thanks.
Sara (Debt Camel) says
I am afraid a CCJ never becomes statute barred.
But can become MUCH harder for the creditor to enforce.
I suggest you phone National Debtline on 0808 808 4000 and talk about your options.
Tony says
HI Sara,
I need help. In 2001 I took out a loan which due to ill health fell into default and was on my credit report as defaulted until circa 2008 when it fell off.
In 2012 the lender issued a CCJ which I defended as statute barred. The lender didn’t respond and it was struck-out also in 2012. In 2014 the lender suddenly appointed a dodgy debt collection agency which used illegal means to try and collect the debt. I complained to FOS and they (debt agancy) were told to pay me £200 as compendation and to desist. In 2019 the lender made a fraudulent entry into my credit report stating I had agreed to an ‘arrangement to pay’. I complained to the Ombudsman again which in May 2021 instructed the lender to remove all entries relating to the debt from my credit file and pay me £150 in compensation. During all of the complaints to the FOS the lender did not respond to any letters from me or the Ombudsman and refuse to abide by it’s ruling 0f May 2021. Now suddenly in Jan 2022 a new credit file entry has been made showing it to be in default once again . This has ruined my credit score all over again and has done so for the last 20 years. I am at my wits end. I am a disabled pensioner. What can I do? Please help!
Sara (Debt Camel) says
and refuse to abide by it’s ruling 0f May 2021
So they never paid you? And the entries are still on your credit record?
Was this a decision from an adjudicator at FOS or a second level “Final Decision” from an Ombudsman?
who is the current creditor?
Tony says
Hi Sara
the creditor is the LondonCommunity Credit Union (LCCU).
It was a ‘final Decision’ by the Ombudsman.
They never paid me , they didn’t remove the entry from my credit record, but during the inquiry by the FOS they changed it’s status to ‘closed’ with a zero balance. They have not replied to two further letters of complaint by me and ignore warnings of being in serious breach of a legally binding FOS decision.
In January 2022 it has been changed again to ‘open’ with a defaulted balance of £2163 and as two months in arrears. My credit score dropped by almost 70 points.
Tony says
Hi Sara,
as yet no email received.
Thanks,
Tony
Sara (Debt Camel) says
check your spam folder?
Paul says
Hi Sara, I received a letter out of the blue yesterday from DWP Debt Management saying I owed them £370. I thought it was a scam letter at first but logged on using the details provided in the letter and it said I owed £310 from some crisis loan in 1997 and £60 for something in 2008.
I did an Accountancy degree and took a year out back around 1997 but all the debts I racked up that kept getting sent to my mums address I cleared from 1999 when I got a decent paid job as an Accountant so I am sure if this had been outstanding and they had been sending letters then the balance would certainly have been cleared. It’s 25 years ago so I don’t recall any of it.
I don’t know where I stand with Statute Barred with DWP. I certainly haven’t paid any payments to these or received any correspondence before (for at least 10 years). I’ve been on the electoral roll at my current address for over 3 years so I’m just wondering why I would suddenly receive this letter out of the blue. Unless they have new computer system or because it’s start of a new tax year they’ve just sent a lot of people random letters claiming money from potentially historic loans that may have been cleared in past years but showing unpaid now. Anyway I haven’t spoken with them yet but do I have claims to ring or write back to them mentioning Statute Barred (prefer to write so its documented)? Thanks for any help
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 about this.
Paul says
Hi Sara in 2013 I had a car which I was paying for each month unfortunately I was sent away for a few years , all this was explained to the company and the car was picked up and taken back . Fast forward to now just recieved a letter off collections company to repay the outstanding debt any advixe
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 – if they think the debt is statute barred, they have a template letter you can send the debt collector.