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 in England says a creditor only has a limited amount of time 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”. 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?
The Limitations Act 1980 sets out the times within which a creditor has to take court action.
For credit cards, catalogues and most loans in England and Wales this time is six years. It starts at the point where the creditor has a “cause of action” – this means the point at which he could sue you. If you are paying a debt normally, you can’t be taken to court for it. So it is only when you have missed a payment to a debt that this 6 year period starts.
If the creditor doesn’t start court action within this time, the debt is not enforceable because it is “statute-barred”.
You may have heard this called ” time-barred”, that means the same thing. Sometimes it is called “status barred” because “statute-barred” has been misheard.
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 consumer credit debt (loans, credit cards etc) 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 acknowledged the debt in writing during this time; and
- the creditor hasn’t gone to court for a CCJ for the debt.
If the creditor has written to you, or you have discussed the debt on the phone the debt should still be statute barred. What matters is if you have made a payment to it or acknowledged it in writing.
If you have reclaimed PPI, this is likely very to count as acknowledging the debt.
With a joint loan, the six years runs from the last point either you or your partner 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, 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?
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, perhaps just a token £1 a month, then it isn’t going to be statute barred – the six-year limitation period starts again after the most recent payment/acknowledgement.
Sometimes this is called “resetting the clock”. Think of someone holding an alarm clock that will go off 6 years after you miss a payment. If you don’t pay anything for a year or two, the alarm clock ticks on, counting down towards zero, but then you make a payment. That doesn’t just stop the clock, it resets it back to the 6 year point.
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. 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 a Letter Before Action/Claim about a statute barred debt
This is a bad idea as this is your last chance to get this sorted without the hassle of defending 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.
What should you do if you get court papers about a statute barred debt?
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. 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, perhaps when you are just a few months away from the statute barred point. Find out more about this situation in No calls or letters about a debt for years?
If you still have money problems and have more recent debts that you are also struggling with, then you look at the bigger picture see A Road Map of Debt Options.
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.
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.
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.
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.
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 on 0808 808 4000 who have Scottish experts.
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, ask it in the comments below.
Updated 2018 – article extended and links updated
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
Debbie says
Hi, I read plenty of advice regarding how to deal with satute barred debts, which have been very helpful. What I really would like to know though is how do you go about removing a statue barred debt from the deeds of a house, if that debt was secured to the property. I have read you can offer a ‘token’ as full and final payment, but cannot see any advice as to where you stand if this ‘token’ is refused? Are we left to the mercy of the creditors, even if it can be proved they have not chased the debt in over 12 years? If I understand correctly a property cannot be sold while there are still companies with vested interests on that property but what happens if that ‘vested interest’ is statue barred, what then? Any help would be greatly appreciated
Thank you so much in advance.
Debbie
Sara (Debt Camel) says
Was there a CCJ for this debt or was it originally a secured loan?
Debbie says
It was originally a secured loan. There is a strange set of events surrounding it though, the loan was fraudulently obtained by my husband first wife, he had no idea the loan had been taken out until the bailiffs showed up. Even though it was established that the signature on the loan application was not my husbands the police refused to make it a criminal matter. Solicitors were involved but the outcome was never settled. The last letter we have is from his solicitors dated 2000, they were waiting to hear but from the loan company no response was even received.
Sara (Debt Camel) says
Statute barring is not relevant for this. You need to talk to a solicitor about getting the charge removed – it is a great pity you let this drop in 2000 as it may now be too late to do anything.
Debbie says
The loan company have not been in touch with my husband for over 12 years, does still not mean the debt qualifies as statue barred? If not is there any thing that we can do to remove this debt?
Sara (Debt Camel) says
No, the 12 years refers to mortgage or secured loan shortfalls, when the house has been sold. Whilst you still own the house, the security remains in place for the loan. Sorry you need to talk to a debt adviser or a solicitor about what your options are.
Debbie says
Ok, thank you.
Evie says
This is a very interesting article. What would apply to a joint mortgage, House was repossessed in 2010 and sold with large shortfall soon after. Initially I had a lot of contact with lender but with no income I have never made any payments, but have been in contact (less frequency) to update address etc. They have not written to me in at least 4/5 years and rarely did so before that. I have no contact with my ex (joint mortgage holder) so no idea on that situation. Would statute barred apply in this case? He also left me with a lot of other debt which I have been paying small amounts on since, but this one was just too big! :(
Sara (Debt Camel) says
Hi Evie, I think you should discuss this debt and your other debts as well with National Debtline – 0808 808 4000.
Bronwen says
I took out a loan with my ex husband years ago, for the boat that we both lived in and that I let him keep when we split up. Being financially abusive to me throughout the marriage and divorce, he stopped paying the loan and the bank came after me. I refused to pay a penny (I have a court judgement as part of the divorce process that if I ever had to pay anything, ex would have to pay me back), but did manage to get the PPI we originally took out refunded onto the balance of the loan.
The loan then defaulted again and has remained unpaid ever since, for over the statute barred six year limit. However it is still showing (with the original bank) on my credit record with a status of ‘Unknown’. It is seriously ruining my credit record.
What can I do? Can I get it written off or removed from my credit record? What does the ‘Unknown’ status mean? The bank hasn’t chased me for the debt, but I have no idea if they’ve been after the ex. If they have, he still hasn’t paid anything. It’s unlikely he’s acknowledged their communications.
Sara (Debt Camel) says
I suggest you talk to National Debtline about this in detail. You need to be VERY sure that it is statute barred before you contact the bank to get them to add a default date to the credit record that is more than 6 years ago…
Nancy says
Hi Sara I’m hoping you can offer me some advice regarding an old utilities debt.
I moved out of a flat in May 2013. I was living alone and struggled with debts while on a low wage so fell behind on some utility bill payments. Recently I have recieved a water bill at my new address for £1900. It claims the amount owed is from 2009 but doesn’t stipulate when it was up till. I lived in the property from 2009 till 2013 but I paid the water for at least 12/18 months. I have since changed banks and have no access to my previous account to check the dates for certain (account is closed). The bill seems to be very high considering it was a small single occupancy flat and I was only there for 4 years. I’m unsure if this debt would be statute bared or not. I’ve had no contact with the company since 2009/10.
If I have to I will accept responsibility (as I know I owe at least some of this money) for it but I can not afford to pay this debt back in full currently. It is still with the water company, no a debt collector and they haven’t gone for a CCJ yet. Judging by the letter I fear this will be their next move though. Where do I stand here? Should I contact them to dispute the amount and time scale? Thank you,
Nancy
Sara (Debt Camel) says
I suggest you ask them for copies of water bills that the debt relates to saying that you were not aware that you owed any money. Then when you have those, go to your local Citizens Advice for help.
Joanne says
I wrote an unsigned letter sent in the post, which I also sent by email where I initially stated the following:
——————————————————————–
“Dear Sir/Madam,
Firstly, note that in this letter I’m not acknowledging that I owe your company any money or that I have any debts with you. The reason I am writing to you is because you have written a number of letters to me and I am replying to your letters.
I suffer from mental illness and for many years have allowed my paperwork to get out of hand and have not been able to manage my personal affairs particular well. Therefore, I am not acknowledging I owe you any money as I do not have any official paperwork such as signed contracts or records that prove I owe your company any money and all I have are general letters from you chasing me for payments but due to my health problems I have not been able to deal with the letters until now.
I keep receiving your letters and naturally I’m worried about them and feel overwhelmed by all this paperwork and feel I must reply to the letters.”
——————————————————————–
In this letter I then gave details of my current financial situation, but at no point did I acknowledge I owe the company any money.
Could this letter be used as proof that I acknowledged the debt and so the 6 years starts from when they received it last year?
Thanks.
Sara (Debt Camel) says
I would hope not. Are you just worried, or is a debt collector threatening court action?
Sara says
Thanks for reply. No court action being threatened but I have no recollection of this debt and they told me on the phone it was lent in Feb 2013, payday loan so the 6 years are getting nearer and I wanted to know whether by writing to them last year whether I had reset this time bar because soon this debt will be statutory barred possibly by March or April next year. I have paid debts I know were mine but this one I do not recall it and am worried about court action so wanted to know if I had ruined it by writing to them last year . I never acknowledged that I owe the debt and made that clear at the beginning of the letter that I was not acknowledging the debt.
Sara (Debt Camel) says
That letter should not have reset the 6 year clock.
BUT you need to know that debt collectors do not normally wait until a debt goes statute barred, it is very likely they will start court action in the next few months.
You say you don’t remember this loan, but did you have payday loans? From that lender – which lender is it?
If you did, read https://debtcamel.co.uk/payday-loan-refunds/ and think if you could ask for a refund if interest from this payday lender (NB from the original lender, not the debt collector) or other ones.
If you win the complaint about this payday lender, then the remaining balance would be reduced or wiped out.
That is likely to reset the statute barred click, but as I said, that rarely works nowadays for payday loans. It is MASSIVELY harder to complain after the debt collector has started court action.
Sony says
Hi
I had a personal loan from a bank in2005 I was making payments for about 8 month until I got into financial trouble and stopped paying the loan. The default loan at some point was past onto a third party company (sold) they chased me for awhile but never responded to any correspondence,they asked me to settle for a reduced amount but I never acknowledged then,later it was past to another third party company (sold) they chased me for awhile asking I contact them and pay a reduced amount, which did not nor did i acknowledge them. It’s been over 12 years now.
So recently I was going threw my old papper work for the ppi claim I came across this loan which I took out in 2005 which 3000 pound of ppi on it for the period of the loan plus 1000 pound interest in the ppi.
My question is, can I still claim the ppi on this account ?
At the point of taking out the loan over the phone they advised me to take out ppi as I needed this in case lost my job etcc at the Tim’e I felt I had to take the loan otherwise I would not get the loan, also over the phone they never explained I would be paying 3000 on the ppi with interest of a 1000.
Please let me know your thoughts as I felt I was pressurised by the sales person on the phone. If at any point they told me it was going to cost 3000 plus 1000 in interest I would not have the loan.
They also did not tell me I could get ppi from another source.
Thanks
As
Sara (Debt Camel) says
yes you can apply and ask for a PPI refund. But if you still owe a balance on the debt, then any refund may be set off against that even if that old debt is now statute barred.
Joanna Asante says
Hi Sara,
I am new to your site, I really hope you can help me. I’ve been receiving letters from Lowell financial chasing me for two old debts. One for EE (which I recognize) and the other from Shop direct which i don’t remember. I sent them a status barred letter because I assumed it must be a very old debt seen as It doesn’t appear on my credit file. They have responded to the letter saying I opened the account in 2004, last payment was in 2008.
Apparently I made a payment between 2009 and April 2013. So based on the last payment of £10 in 2013 (which I don’t remember) they state that the letter is not statute barred. The letter also states a CCJ was issued against me in MAY 2014, with the terms to pat £50 per month (again I had no clue) which is now in arrears.
I need some advice for the best way to proceed please. I am now stuck. The total debt they claim is £1180.23, I can’t afford this as I am already struggling financially. Please help, what do I do next?
Thanks in advance for your time.
Jo x
Sara (Debt Camel) says
Have you asked them for some proof of this CCJ? Ask them for the Court details. It would normally show on your credit record – have you moved?
If there was a CCJ in May 14 then at that point it may not have been statute barred if the last payment was in 2008. And if there was a CCJ it can never now be statute barred.
What is your current financial situation – do you have other debts?
Nicholas says
Hi Sara, my last payment was 5 oct 2012, is it statute barred now or from the 5th November ?
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 about this specific debt
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.