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?
The law only gives a creditor a limited amount of time during which action can be taken against you. The legal term for a debt that is so old that it can’t be enforced in court is “statute barred”. This article answers the most common questions people have about it.
NB If you are making payments the debt will never become statute barred no matter how old it gets. In this case, this article isn’t relevant, instead read Can I stop paying this old debt?
Why does “statute barred” matter?
If you aren’t making any payments to a debt, the creditor has got to take you to court within a certain time which is set out in the Limitations Act 1980.
For most unsecured consumer debts in England and Wales such as credit cards and loans, this time is six years from the point at which you failed to make a payment. 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. The Financial Conduct Authority’s rules about statute-barred debt are here.
How can I tell if my debt is statute-barred?
Unsecured loans and credit cards will normally be statute barred in England and Wales if:
- it had been more than six years since you missed a payment; and
- you haven’t had any contact from the creditor during this time; and
- the creditor hasn’t gone to court for a CCJ for the debt.
If you have had some contact but haven’t made a payment or acknowledged in writing that you owe the debt, the debt should still be statute barred. If you have reclaimed PPI, this is likely to count as acknowledging the debt.
With a joint loan, the six years runs from the last point either you or the other debtor made a payment to it. If you have split-up, you may think a debt is statute barred but actually it isn’t because your ex has made a payment to it.
The situation is more complex for overdrafts and any other forms of debt where there was no set repayment period in the contract – contact National Debtline for advice about these.
Determining the exact date on which a debt becomes statute-barred can be complicated, see this factsheet: When Does the Limitation Period Start Running? Sometimes the exact date 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.
I suggest you call National Debtline on 0808 808 4000 and talk through your situation with them.
Secured debt – mortgage shortfalls
For a debt resulting from a mortgage shortfall, the time allowed in the Limitations Act is twelve years. Many lenders however follow the old Council for Mortgage Lenders code which is now incorporated into MCOB (Mortgage Conduct of Business Rules) which 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.
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.
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, 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?
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. If you made any payments to it that “resets the clock” so the six-year limitation period starts again after the most recent payment/acknowledgement.
A typical example: Mrs H is in a long-term debt management plan. Initially she only made token payments. After a few years she increased her payments and now, after seven years, she has about two years to go. Her debts will already have fallen off her credit record as it is more than six years since defaults were added to her accounts, but as she is making payments each month they are not 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 acknowledgment 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.
Can I ignore a letter about a statute barred debt?
Are you absolutely sure that it is statute barred? If you aren’t certain, then you should probably write a “Prove It” letter to your creditor. This is worded so that it doesn’t acknowledge the debt.
If you are 100% 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, otherwise the next letter you get may be a court form about a CCJ. Here is a template letter you could use:
I am writing in response to a letter from you dated [dd/mm/yy], a copy is attached.
I deny liability for what you are claiming. In addition I have not made a payment to this debt or acknowledged it for over six years. This debt is therefore statute barred and I will not be making any payments to it.
Under the Limitation Act 1980 you cannot take court action unless you can provide evidence of payment or written contact from me within the past six years. The Financial Conduct Authority rules state:
CONC 7.15.4 Notwithstanding that a debt may be recoverable, a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period.
CONC 7.15.8 A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred.
If you continue to contact me about this debt, I shall put in a complaint to the Financial Ombudsman.
Yours sincerely, [name]
Can I ignore court papers about a statute barred debt?
No. If you ignore the Claim Form, 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. If you are unsure what to write on the defence form, phone National Debtline and talk to them.
Can I just wait for my debts to become statute barred?
If creditors haven’t contacted you for a few years, you may be hoping that they have forgotten about the debt, so you can get through to the six-year point. This may work, but it is common to find after a while that the letters start again. This may be when your debt is sold to another debt collector, or it may be when you are just a few months away from the statute barred point.
It’s hard to get through life without the credit reference agencies knowing where you are these days, so hoping your creditors can’t find you rarely works.
If you still have money problems and have more recent debts that you are also struggling with, then you should be looking at the bigger picture as even if the older debts become statute-barred, that won’t help a lot,so look atA Road Map of Debt Options.
Find out more about this situation in No calls or letters about a debt for years?
Can I ignore letters when it’s a few months before six years?
This isn’t a good idea. The creditor just has to start court action before the 6 year point – they don’t have to actually get a judgment before that point.
If you aren’t sure whether the debt is yours, whether it is for the right amount or whether it might be statute barred, then best thing is to reply with a Prove It! letter. But if you know the debt isn’t statute barred and you do owe the money then read Threats of Court Action – Are Debt Collectors Bluffing?
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 happen to you, contact National Debtline.
Do tax debts or benefit overpayments or council tax arrears 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 Bureau.
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.
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. It is therefore 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.
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. But if you have a general question about statute barred debt, then you can use the comments below to ask it.
*** updated 2017 – article extended and links updated
do I have to pay a debt not on my credit record?
What to do if you receive a court form
How to find if you have a CCJ
Sarah says
Hi, this is a great thread and have found some useful info
I have not made payments on debts or had contact with any of my creditors for some 15 years. I believe I did have CCJ against my name but due to the length of time these have all subsequently fallen off of my credit report. I recieve letters from time to time with settlement rates etc but still have had no contact. Am I right that to enforce these debts they will have to go back to court and if that is the case I will get written notice of this?
My second query is I have recently checked my credit report and found a CCJ from 2011 that is due to expire in Jun 2017. As I was unaware what this was for I contactected the court who advised that it was for water utilities ( for a property I vacated in 2006 and that my water was included in my rent, but no point In crying over spilt milk as due to the length of time I have no way of proving this). The court also advised it had been transferred to another court. As it is so close to being removed from my report is it likely that they will make a further judgement? do you think I should wait it out until Jun or settle the sum pre Jun to avoid a further judgment this is the only negative on my credit file and I could benefit significantly with this being removed.
Thanks in advance
Sara (Debt Camel) says
Your first query – are you asking about enforcing old CCJs? Yes the lender will have to go back to court. Yes you should get a written notice, but that depends on knowing where you live… although a creditor who doesn’t know where you live isn’t very likely to do anything I suppose.
The CCJ for 2011 – it won’t “expire”, CCJs never do. It will drop off your credit record. After there is one judgment there can never be a second one.
Rachael Russell says
Hi,
Back in April 2011 I defaulted on credit card repayment due to financial struggles. From looking back on my credit report, I think the last payment was made in September 2010. Since the default I have made no further payments, had no contact with the credit card company, or the dca who bought the debt. They have ocassionally sent letters about repayment which I have just ignored. When I last looked at my credit report (last month) the defaults were no longer listed on there. I have received an email from Experian this morning to say there had been a change on my report & the defaults have re appeared (one for the original CC company which states nothing is owed & one for the dca who bought the debt) with an “updated” default date of Jan/Feb 2012. I’m not really sure what is going on, can they do this? Technically the end of this month is 6 years from default date but it’s over 6 years since I last made a payment. I have been trying to build my credit score & this has severely put a dent in that.
Sara (Debt Camel) says
Are you saying this debt used to appear on your credit record with an older default date and the debt then dropped off after 6 years? What was the original default date?
Rachael Russell says
Many thanks for your prompt reply.
The original default date was 30th April 2011. The defaults had always been on my credit file. Last month when I checked though they had gone. Today they have reappeared, making a massive dent in my credit score. The default date is still the 30th April 2011 when I check but on the relisted defaults they have 2 new “updated” dates of Jan & Feb 2012. I’ve tried to add a picture but it won’t let me.
Bebe says
I owe my local authority £44.00 and wish for them to rehouse me. the sum I owe has just been brought to my attention and it is more than 6years old. am I legally bound to repay it? can they ask me to pay it?
Thank you
Sara (Debt Camel) says
If you want to dispute this, then I suggest going to your local Citizens Advice and asking for their help. If this is the only thing standing between you and being rehoused, you may want to consider if it wouldn’t be simpler just to pay it though.
Callum says
I have a debt from ten years ago which I started a payment plan and was keeping up with for ages until all of a sudden I noticed the payments stopped coming out of my account, which I did not cancel or stop myself. I therefore assumed I’d paid the amount back. Then out of the blue about 18 months ago another debt collector contacted me telling me I owed money on the debt, I asked for proof to be sent to me but never heard a thing after that phonecall. Now I’ve just received another letter from them about the debt which I have once again asked them to send proof but still nothing. That was almost two weeks ago, they gave me until Friday 21 to get back in contact after receiving there proof which hasn’t been sent, what should I do? Send the prove it letter so it’s in writing? I’m also very sure the last payment I made was over 6 years ago to the original debt collector, so is surely statute barred right?
Sara (Debt Camel) says
What sort of debt was it?
James says
Surely if a debt has become statute barred any associated PPI claim will also be out of time?
Sara (Debt Camel) says
So far as I know, the 6 year limitations period for a PPI claim starts when you become aware you were mis-sold PPI. This could well have been later than the point at which you missed a payment to the debt.
Gary says
Hi I have a credit Card debt in which I last paid in April 2011, since Dec 2016 I have had a company chasing the debt and they went to a business court to try and get the money back. I advised the court that I thought the debt was statue barred to stop any proceedings, the company chasing the debt has disagreed with this. I have made no contact with this chasing company so I would like to know if the debt is indeed statute barred or because they have made contact with me within the 6 years period that it is not statute barred. Thanks
Sara (Debt Camel) says
Hi Gary, I suggest you talk to National Debtline on 0808 808 4000 about this.
paul says
I have just received a latter from HMRC claiming about 5 K for over payments in2005I wrote in about 2014 saying i disputed it it i told them on the phone about changes in my income at the time so passed it on to a debt recovery co told them, they say we have chosen to ignore them and will be sending one of the collectors round in the next few says. Can any one tell me if they know it is statute barrred. i separated from my wife 2 years ago she is claiming tax credits i am not i an unemployed could they recover it from her credits thanks
Sara (Debt Camel) says
I suggest you go to your local Citizens Advice and ask for help with this.
Viki says
As far as I’m aware, a hmrc related debt cannot become statute barred. By law you have to pay anything owed to them. Believe me, I’m currently paying a debt to them from 2003. There’s no way out of this. Under same circumstances too, they kept paying me after I told them TWICE about my change in circumstances. Citizens advise can’t help with it either, I tried that, only thing they could suggest is making a payment plan.
sarah says
Hi There,
I had a default recorded in Nov 2011 for a credit card. I understand that this debt was later sold to a company that took me to court and I now have a CCJ recorded on my credit file from last year. I later found out that I have been a victim of fraud as a few credit cards have been open with my name including this credit card. I called up the company but they said that there is nothing they can do about it as the court has already made the ruling. Can a company take you to court for CCJ even after having a default recorded and still active. that means having an active default and a CCJ for the same issue. from my records this means that I have 11 years on my record for the same issue. Does the court consider the default time?
Sara (Debt Camel) says
I think you should talk to National Debtline about whether it is possible to “set aside” this CCJ if you can show you didn’t open the account and that it was fraud.
But yes it is legal for a company to go for a CCJ after a default has been on your record for 5 years. The court takes no account of your credit record.
Lee Johnson says
Hi, I believe I have a statute barred account. Last payment on the account was 2010. The original creditor has sold the account on and it now has its 5th different owner (DCA). I believe that it is 6 years from the last payment or ‘acknowledgement’ for a debt to become statute barred? But the DCA that owns it now says I acknowledged the debt in a letter in 2013. The letter that I sent does say “that I agree there is a debt although I dispute the balance which I have since 2010”. The letter I sent though was not to the original creditor, it was to the previous DCA owner of the debt. Is it still statute barred or have I reset the clock?? I have read that acknowledgement needs to be to the original creditor to reset the clock, not a DCA that has bought it?
Sara (Debt Camel) says
It doesn’t matter whether an acknowledgement is to the original creditor or a DCA, it still resets the clock.
Lee Johnson says
Thank you….. so the actual wording on the letter I wrote was…. “whilst I agree there is a debt I dispute the balance and refuse to pay it in full”. Would this still classed as an acknowledgement? I’m agreeing yet refusing in the same sentence.
Sara (Debt Camel) says
I am not a lawyer but it looks to me as though you have acknowledged the debt – you could talk to National Debtline about this 0808 808 4000. Disputing the balance is not the same as disputing the debt.
Lee Johnson says
Ok so I’m clutching at straws here. Thanks for the number. Find it strange how the DCA at that time then sold the account to another DCA yet didn’t pursue me if I had acknowledged. Account seems like a hot potato. Where would I stand in court if I were to highlight that the account has been sold on 4 times whilst I have unassumingly ‘Acknowledged’? Effectively I have a acknowledged since 2010 yet I have not been vigorously pursued by anyone
Sara (Debt Camel) says
I think you are clutching at straws. The 2010 date is irrelevant if you acknowledged it in 2013, as you may have.
The Limitations Act is a maximum time for a credit to take action, there is no obligation for a creditor to act promptly. There is no reason why a debt can’t be sold several times. There is no obligation for each new creditor to take action. They haven’t done anything wrong here. Sorry.
You haven’t mentioned what the debt is. If it is consumer credit act debt, then have you asked them to produce the CCA agreement for the debt? See https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx
FmCool says
Thanks Sara for your help thus far. i have contacted the court and i have been emailed the claim form, filled and returned to the court. the court sent a letter of acknowledgement of my defense and that a copy been sent to the claimant. today i received a later from the creditor that my case is on hold as it is being reviewed and a copy of Directions Questionnaire (Small Claims Track) which they had filled and that i will be sent my copy directly from the court to be filled so that the court can then make decision from these documents.
i have asked the creditor severally to prove/send me evidence of my last payment which has been my defense and up to date they are yet to get that to me.
where do i stand now or way forward?
Sara (Debt Camel) says
As I said before, talk to National Debtline. Sorry, I can’t provide advice on an individual court case.
E help says
I stupidly rang NRAm today who sent a letter. They informed me that I owed 62,000 from an old northern rock mortgage from a home that got repossed bsvk in 2006.
My credit report stated that it was settled in court.
I now having worked hard to get my new mortgage they state I owe all that back. I have not received anything from that within that time period.
It’s really worrying me. I know a PPi claim cake back in two years ago from them but as far as I was concerned it was all settled,
They were so threatening on the phone.i am now worried sick.
I gave them an old address as they stated asking financial info over the phone. They could of been anyone.
Sara (Debt Camel) says
“My credit report stated that it was settled in court.” Sorry, could you giv some more details about this?
E help says
My experian report said it defaulted then it said back in 2008 it was satisfied or settled. I obviously had to wait years.
The person on the phone said they had been calling my number which is untrue but not sent me any letters. He then asked what can I pay today.
Sara (Debt Camel) says
OK, so there was no reference to a court on your credit report – that’s good.
Are you sure you were talking to NRAM, not a debt collector?
E help says
No reference to a court at all.
I’m unsure I rang the letter which was from NRAM he put me on hold for ages. He very rude demanded my financial status and to pay.
He said he was going send me letters etc but I gave him my old address as it occurred to me I don’t know who this person is.
He threaten to take my home away, left me with a very sleepless night.
Sara (Debt Camel) says
OK, it’s just that you wrote “My credit report stated that it was settled in court.” so I was querying that.
It’s a shame you didn’t do the sensible thing and go bankrupt back in 2006. And also that you made that PPI claim.
However NRAM should not be behaving aggressively and threatening you, certainly not on the first contact for 11 years. I suggest you call National Debtline 0808 808 4000 on Monday and ask for their advice.