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
How to find if you have a CCJ
Andy Lloyd-Jackson says
Hi Sara
Just a quick question about a debt dispute with an individual.
In April 2011 an individual was going to take me to court (High Court London) about a personal loan debt.
It was a loan between 2 individuals.
The person made a claim against me saying I still owed money, and it was registered at the high court.
However the individual never proceeded with the court case.
I wrote to the court disputing the claim made and was going to attend the hearing.
The claim was on my credit report for 6 years but has now been deleted.
We are now 7+ years later. Can that individual still make a claim against me in the future at anytime ?
Your advice would be helpful.
Sara (Debt Camel) says
Do you know what happened to the court case? Was it thrown out? Or just “stayed”?
Elizabeth says
Hi Sarah
Query in connection to a Water debt not mine so maybe gaps in my information, and unable to find a definitive answer online.
Background: Water Account defaulted 2012
No payment or acknowledgement since that time (apparently)
Each year since 2012 new annual unpaid bill amount added to existing default. ie April 2012 £500 owed, April 2013 £800 owed, April 2014 £1110 owed etc
I have advised that water debt is different in this case, as rolling account so amount owed will not drop off credit report after 6 years(?) Due to not being a static amount(?).
Any payment made now will go to the oldest debt account first to clear that. ie outstanding debt outstanding for 2012(?)
However, am i correct in advising that :
. any water debt owed prior to April 2012, not paid or acknowledged is now stat barred? or Do the water authority have additional legal rights to go back further than 6 years.
. the Water authority will need to reflect any adjustments older than 6 years via the outstanding amount shown on the credit report?
I think i’ve covered it but…..
Sara (Debt Camel) says
Is there actually a default date on the water debt on your credit record, if so what is it? Or is it just marked as 6 months in arrears?
Elizabeth says
Hi Sarah
i understand that there is actually a default date on the credit report. The default date is sometime in 2012 i understand. I will have to ask them the exact date if necessary as i do not have access to that information myself.
6’s were mentioned and i have no idea what the consequences of the 6’s would be:-(
Sara (Debt Camel) says
No, check your own credit reports! See https://debtcamel.co.uk/best-way-to-check-credit-score/ for how to do this for free.
6s mean that you are at least 6 months in arrears and that no default date has been added.
Elizabeth says
Hi Sarah
For clarity
I am raising this query with you for someone else, which is why i do not have access to all the information. I did state this at the beginning of my first post.
Thanks for your help
Sara (Debt Camel) says
So you did, sorry! In that case you need to ask them to check their credit record. My guess is that there is no default on the credit record and the account is showing 6m in arrears. It will therefore not drop off until it is closed because there is no default.
Assuming that is correct and turning to the question of whether the debts are statute barred…
Water debts become statute barred 6 years after the date of the bill. If this is over 6 years ago the Water company could no longer take the person to court for a CCJ for the oldest year, but they could for the rest of the more recent years.
Just because a debt is statute barred doesn’t mean it no longer exists. It is still correct for this oldest year amount to be showing in the total balance on person’s credit record. And the Water Company can take payments made to clear that oldest debt.
So… why hasn’t the person paid their water bills for so many years? Have they looked into their options for trying to sort these out, see https://debtcamel.co.uk/cant-pay-water-bill/ .
Elizabeth says
Hi Sarah
Thank you for your response.
I think the default information comes from a letter from the water company, not a credit report. Not sure will get them to check credit file.
Makes sense to me and i will be forwarding the information.
Very pleased you put me right about the stat barred issue. Situation rectifiable. Would have hated to put them on the wrong track.
Kelvin says
Hi there
My loan was sold to Cabot financial in 2009 the took out a ccj on me in 2014 some 5 years and 10 months later
They state that a payment that failed on the 16/12/2008 is my last payment
As this fail does this count as a payment or do I go back to the last successful payment
Sara (Debt Camel) says
Are you hoping to be able to reopen the CCJ and fight the court case on the basis that the debt is statute barred? When did you find out there is a CCJ?
Kelvin says
Hi there
Yes I have stated to the company that the debt was statues barred when they raised the ccj and want to fight for them to remove the ccj from my record.
I found it July this year when I ran a credit check. The last credit report I ran previous to this was 2010
Sara (Debt Camel) says
You need to talk to National Debtline https://www.nationaldebtline.org/ about this CCJ urgently. You are supposed to apply for a CCJ to be set aside “promptly” when you find you have a CCJ you never received any paperwork for. This is more than 4 months later…
After a set aside the court case normally restarts so you can defend it. But you don’t want to do this unless you are pretty sure you are going to win a defence on the grounds of it being statute barred – National Debtline can talk about too. Because if you lose the case you will now have a CCJ in early 2019 on your record until 2025, whereas this old one was going to disappear in 2020.
Dale says
Hello,
I had an account with British Gas in 2010.
The last payment I made to them was on the 09/01/2012, I haven’t made a payment or admitted the debt since then. I have spoken to them over the phone but always denied I owed the money. Will this now be statued barred?
British Gas are reporting a default on my credit file from sept 2014, 2 years after I moved out the property and made last payment, when should the 1st default be recorded and how do I get them to put the default at the correct date? Over 6 years has passed so technically it shouldn’t even be on my credit file?
Thanks you
Sara (Debt Camel) says
When did you leave the property? The last bill will presumably have been some time after that – did you tell them when you moved out? A gas bill becomes statute barred 6 years after the date of the bill.
Dale says
Hi sara
The next bill was June 2012, I moved out the property in June 2013 and I informed them I moved out
Thanks
D Conway says
Hi, I have a Mortgage shortfall which officially went into default in June 2014! Here’s the complicated bit! i made my last cash payment back in Feb 2012, when i handed back the keys, it took the mortgage company until June 2014 to sell the property and reduce the overall balance, this then registered on my credit report as a Payment. It’s from this date that they registered the account as defaulted! (Is this fair, considering i made my last cash payment over 2 years previously)! If you agree this is unfair and the default date should be Feb 2012 is it advisable to contest the default date? bear in mind i’ve had not acknowledged the debt in any form in over 6 years!
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 about this specific lender and whether they follow the Council for Mortgage Lenders code mentioned in the article above.
It is a great pity you did not go bankrupt in 2012. If you had, this would all be behind you and your credit record would now be clear.
Lauren says
Hi, I received a letter from a debt collection agency named QDR solicitors. The letter stated that they had been advised that I was residing at my current address. I was to contact them to confirm these were my contact details and if I did not contact them they would assume that they had the correct information. The letter did not state what it was regarding and only gave a reference number. I contacted them today by phone, after passing security checks the lady then said to me it was regarding a debt which was outstanding for a TalkTalk Contract Phone for 24 Months. The debt has never appeared on my credit file and I have checked with both Credit Expert and Noddle. The last known payment on the account was the 23rd February 2013. The debt appears to be over six years and was totally unaware about this outstanding balance. When I spoke to them on the phone, I told them I was unaware about this outstanding debt. I have had no letters about the outstanding balance and this is the first correspondence I have had about it. Please could you advise what my next action is to take?
Sara (Debt Camel) says
“The last known payment on the account was the 23rd February 2013. The debt appears to be over six years and was totally unaware about this outstanding balance.” It doesn’t matter how old the debt is, what matters is when you last made a payment to it. Can I suggest you talk to national Debtline on 0808 808 4000 about your situation and this alleged TalkTalk debt.
Pearlygirly says
Sara, Is there going to be an appeal by Doyle? This is a ridiculous judgement and trampled all over the doctrine of Laches. Clearly Lord Etheridge is favourably disposed to creditors. His arguments make no sense especially the public policy one saying debtors will enjoy an extended period of credit if the default is delayed!!! Yes and what about the spiralling interest and charges? If this stands it will cause huge uncertainty. Will non defaulted debts be due debts now? Etcetc
Sara (Debt Camel) says
This was an Appeal Court decision… I agree it is very unsatisfactory.
Ernie says
If I send a SAR to a payday lender, will this restart the statute barred clock ?
Sara (Debt Camel) says
Probably. But if the debt is already statute barred, it will remain statute barred. And in practice it’s very risky hoping a loan will become statute barred – it’s more likely you will hear from a debt collector in the last few months.
The longer you delay asking for a refund, the harder it can be as more of your loans are over 6 years old.
Which lender are you thinking of? How old is the loan you have defaulted on? And how many loans did you have from that lender before that?
Claire says
Hi there I have received a letter from Cabot stating that they have passed my credit card debt to Global Debt recovery, I last received a letter from Cabot about this account in March 2014 when i Sent a prove it letter, with out ackowledging the debt, They replied saying they didnt have the signed agreement but would provide it within 40days which they never did, I never heard from them again until Dec 2018. #
The last payment on this credit card account was April 2009 and an old credit report shows it went in to default 30th November 2009 and no longer shows on my credit report. It it ok to send a statute barred letter and if so do i send it to Cabot or to Global debt recovery
Thank you, your advice would be greatly appreciated
Sara (Debt Camel) says
I wouldn’t bother with writing a statute barred letter. Write to GDR and say that Cabot have been unable to produce the CCA agreement for the debt in 2014 and unless GDR can produce it you will not be making any payments to it.
If they are so foolish as to start court action (which is VERY unlikely) then you should include all the possible defences including statute barring. But at the moment you know the debt is unenforceable because of the lack of a CCA so just stick to that argument.
Claire says
Thank you very much for your help
Daniel says
Hi Sarah great site! Please could you help? I have an old debt (second mortgage on a reposesed house) my ex went bankrupted and I was left with the debts I have not contacted them in nearly 6 years and have only ever received a statement from them. Not and letter asking for payment. But each month it shows a 6 on my credit file as does another debt that again iv had no contact from. Does the 6 mean that they won’t go barred? Thanks in advance
Sara (Debt Camel) says
Something that does not have a default date on your credit record is never going to drop off.
This doesn’t mean that it will never become statute barred – but you need to be VERY sure a debt is statute barred before you contact the creditor and ask them to add a default date…
I suggest you talk to National Debtline about both debts – and any other ones you have. It is a pity you did not go bankrupt years ago when your ex did.