Statute barred debt: A step-by-step guide

posted by in Collection Process, Debt

What counts as credit?

Can Statute Barred debt be written off?

We never encourage people to avoid paying their debts. You won’t hear us making false claims about “getting your debts written off”. That’s what daytime TV advert breaks are for.

We’re here to give the expert debt help and practical solutions people need to get back in control of their finances.

That being said, we’re here for you. And as my old school teacher use to say (a lot), “knowledge is power”. I want you to be armed with everything you need to get debt free and stay there. That’s why I want you to know about statute barred debt.

Update: Read more about statute barred debt on our website.

What is statute barred debt?

Statute barred debt refers to a debt that’s not enforceable because the time a creditor has to chase payment has passed. This is outlined under the Limitation Act 1980.

The act is not a way for people to avoid paying debts. If your debt is not statute barred there’s no way to use the Limitations Act to avoid paying it. But non-enforceable debts are sometimes pursued by debt collection companies when they shouldn’t be, so it helps to know where you stand.

How long can a creditor chase a debt for?

Under the Limitation Act 1980 a creditor has six years to chase most unsecured unpaid debts, or twelve years for some mortgage shortfalls. This ‘limitation period’ starts from the time of your last payment or acknowledgement of the debt, not the total length of time you’ve been making payments. If a court judgment (CCJ) has been registered against you before the limitation period has passed it can be enforced at any point. There is no limitations period for a CCJ.

For Scottish debts the rules are different as statute barred debts cease to exist (and creditors aren’t allowed to ask you for payment) after five years, unless the court has issued a Decree before the five year limitation period.

The Limitation Act doesn’t apply to debts owed to the Crown such as income tax. Because the act prevents court action, some debts such as benefits overpayments and Council Tax sometimes use different collection methods that don’t involve the court, which means the debt can be collected even after six years have passed.

When can the Limitations Act 1980 be used?

The act states that when ALL of the following conditions are met a debt cannot be enforced:

  • The creditor has not registered a County Court judgment (CCJ) against you
  • You (or with joint debts, you and the other person) have not made a payment in the last six or twelve years
  • You have not admitted the debt in writing in the last six or twelve years

What does ‘not enforceable’ actually mean?

If a debt is statute barred it isn’t ‘written off’ and it doesn’t disappear. If a debt is not enforceable it means that if a creditor tries to take you to court, you’ll be able to defend the case and you won’t get a CCJ. Creditors aren’t allowed to keep chasing a debt that is statute barred if they haven’t been in touch with you at all during the six year limitation period, but they can keep asking you for payments if they’ve been in regular contact. If you’ve changed address without telling the creditor or not opened the letters, this doesn’t mean that creditors haven’t tried to contact you.

Some creditors, such as the DWP (Department for Work and Pensions), have legal powers which allow them to take money from wages or benefits without going to court. They can still do this even if the limitation period has passed.

What to do if you think your debt is statute barred

The thing with a statute barred debt is that the burden of proof is with the creditor to prove you do have to pay it, not for you to prove you don’t. If a creditor has contacted you and you definitely know the debt is statute barred you should write to the creditor to tell them.

Template letter for statute barred debt

Here is the statute barred template letter (PDF) you can send. just add your name, address and the creditor’s details at the top. It doesn’t have to be exactly the same as this if you’d prefer to write your own.

Here’s what to do if you think your debt is statute barred:

  1. First of all you should get a copy of your credit file. You can do this for free at Noddle
  2. Write to the creditor contacting you (using the template letter above). Send the letter recorded delivery from the Post Office so you can prove they received it
  3. Be aware that if the full six or twelve year period has not passed, if you make a payment the limitations period would start again from that point
  4. If they continue to chase you without sending proof complain to the Financial Ombudsman who will take up your complaint. Don’t go to the Ombudsman first as they’ll bounce back your complaint
  5. If they do send proof and you’re liable don’t feel pressured to pay more than you can afford. Use our confidential online debt advice tool, for a free budget assessment and personal action plan explaining exactly how to deal with your debts

Of course just because a debt is statute barred, it doesn’t mean you can’t pay it off. If you know you owe the money you may want to pay it back. As they’re non-priority debts creditors are only entitled to payments you can manage and we can help you work out the quickest way to pay the debt back.

We get lots of comments on this post, so if your question hasn’t already been answered in the article, have a read through some of the many questions we’ve answered for other people.

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Tags Collection Process Debt
  • mike watterson

    I agreed a deal with a Sporting body (The World Professional Billiards and Snooker Association) in 1986 September. I fulfilled my part of the bargain immediately. I received written confirmation of the deal from the association, but they never made the payment of £5,000 which was their part of the deal. I have repeatedly asked them over the years to honour their payment without any success. I was unable to sue them because I was a playing member of that association, and would have been thrown out. I was told by them recently that the S.of Limitations says that they no longer owe the debt. What can I do ?.

    • moneyaware

      Hi Mike,

      The Limitations Act, as described in the article means that no further action can be taken to try and recover certain types of debts after a period of 6 years or more. In your case, it’s difficult to offer an answer as there may be other factors involved and our advice in this area is limited.

      If the debt does fall under the Limitations Act, then it may not be possible for you to take any further action to recover the debt.

      Kind regards

      Rory

      • mike watterson

        Thank you for your reply.
        The problem would need to be explained to you in detail, and would take 30 minutes for you to understand fully as the detail is all important. I paid for and was expecting a telephone call, which sadly I have not received. There is fine detail involved, as I was the person that built Snooker from nothing in the late `70s and early `80s, and have been kicked in the teeth ever since. That is a matter of history. You can look me up on Google.

      • moneyaware

        Hi Mike,

        With any answers we give, these are based on what information is provided to us in your question. Our advice on the legalities of debts or disputing an amount owed is also limited, so you may need further legal advice in your situation, which is beyond the advice we can give.

        Kind regards

        Rory

  • Darren

    Hi there
    Back in 2007 i had taken a loan out with a company to help pay for few things moving into new home, i made the first few repayments and then lost my job i sent a letter and contacted them regarding this. And was told that when i get back into work to start making payments again, however i since havent paid any of the loan back as i completely forgot about this only for me to check my credit file and see it on there. What happens now what can i do as i dont recall on receiving letters for at least 6 or 7 years regarding the debt?
    Is there anything i can do to have it removed from my credit file ?? Would i need contact them to arrange payments.. thanks

    • moneyaware

      Hi Darren,

      It may be that this debt is statute barred. The above article should give you the information you need to check this.

      The timescale for a debt becoming statute barred isn’t related to information held on your credit file, so it’s possible that a debt may be statute barred but information still exists for the account on your credit file.

      However, it may be worth making sure any information on your credit file is accurate. If dates are incorrect or information is wrong then you could contact the credit reference agency and ask them to correct it.

      If the information on your credit file is accurate and the dates are correct then it’s likely to be very hard to remove it other than waiting for it to drop off. Information on your credit history usually lasts for a maximum for six years, so it might be that it’s due to go away soon anyway.

      Kind regards

      James

  • Jo Hamlett

    My husband has had a letter from AIC on behalf of Arrow Global claiming he owes £900 plus. We have very good reason to believe this is over six years old so I have sent the statute barred letter. However this also doesn’t appear on his credit file. If they are able to request payment of this debt should it also appear on his credit file?

    • Becca Drury

      Hello

      Thanks for your message. This company appears to be a debt collection company. You can read more about debt collections here: https://www.stepchange.org/debt-info/debt-collection/debt-passed-to-a-collection-agency.aspx

      Don’t ignore there letters as they may take further action. We would advise getting in touch with them to find out where the debt originated from and how old it is, and see if you can arrange a payment plan with them if the debt is not statute barred.

      If you are liable for the debt, and are unable to pay you can complete our online debt remedy tool to see if there is a solution that might be suitable for your circumstances: https://www.stepchange.org/Debtremedy.aspx

      Thanks

      Becca

    • moneyaware

      Hi Jo,

      Thanks for posting.

      Most things appear on your credit file for six years before ‘dropping off’. This doesn’t mean you no longer owe the debt though so creditors are still able to ask for payment.

      I hope this helps,

      Jen

  • Maria

    Hi

    My situation is a bit different because it does not involve a company. Essentially a person I lived with for a short while in March 2006 is chasing me for half of the rent that was paid on the tenancy in 2006/07. He paid 12 months rent up from together with the deposit when we took out the tenancy agreement as I could not afford too. He never suggested at the time that I would need to repay anything to him at any time. The relationship didnt last and I moved out after about 6 weeks. He has never been in touch with me about this, not once until Saturday and now he is asking if I am in a position to repay him the 6 months rent that I promised to all those years ago. I am not sure if I need to go to a solicitor now or wait for him to send me the solicitors letter he is promising.

    I never agreed to repay him anything, he didnt ask. Do you think this fits into the 6 year rule?

    FYI he was in touch with me last year but didnt mention this and that didnt end well, he is not a very nice person.

    • Becca Drury

      Hello Maria

      Thanks for your message. We’d recommend that you get in touch with Citizen’s Advice about this particular situation: https://www.citizensadvice.org.uk/ to discuss your legal position.

      It’s unclear whether the money he is saying you owe him would be enforceable through the courts.

      What he’s describing sounds like an oral agreement between the two of you, and without a written agreement between you both regarding the rent, it may be difficult for him to pursue you.

      I hope this helps.

      Becca

    • moneyaware

      Hi Maria,

      Thanks for posting.

      If the person contacted you last year, then assuming no payment or written acknowledgement of the debt was made before that, the period 2006/7 to 2016 includes more than six years. This means the debt could be statute barred.

      Even if you had made an agreement to
      pay him, this would be a simple contract so it would come under section 5 of the Limitations Act 1980 and
      would have a six year limitation period. Again, assuming it met the criteria above it’s likely to be statute barred.

      Technically the six years for the limitations period to start doesn’t begin until the debt is due to be repaid. So the person could claim that you agreed to pay them back in 2011 for example, at which point this would be the start of the six years. However, it’d be up to him to provide evidence of this agreement.

      I hope this helps.

      Kind regards,

      Jen

  • Jane

    Hi
    I have received a letter from DWP stating I owe £300 from 2009. They state they have sent me letters from 2010 and a debt recovery agent has attended my address…..these have never happened. Will a statue barred letter help in this situation.

    Thanks

    • moneyaware

      Hi Jane,

      Thanks for getting in touch.

      If you believe the debt is statute barred you can use the letter to write to the creditor to let them know. If the debt is statute barred it means the creditor can’t use court action to enforce it.

      However, it’s important to note that some creditors have extra powers available to help them reclaim a debt – that don’t involve court action.

      The DWP (Department for Work and Pensions) is one of these creditors. They have legal powers which allow them to take money from wages or benefits without going to court. They can still do this even if the limitation period has passed.

      Kind regards,

      Jen

  • Tom Thompson

    Hi,
    I lost my job in 2010 and was unemployed for 19 months. In that time, I did not make payment to a personal loan with a lender. When I eventually went back to work, and up till now, my priority had been paying off my mortgage arrears (12000 when I started paying it off) utilities and council tax arrears. Other debt, including the coop debt were not paid at all as I couldn’t afford them.

    Last week, I received a letter from the lender, threathning legal action. The last payment on the loan was in July 2010. I have now gone to register with noddle, as you suggested, and noticed that in May and June 2013, my credit report shows this accout as OK. I think this is a ploy to reset the statute barred limitation. As you can see, no payment was made. Could this affect my statute barred defence? I am still sorting out my mortgage arreas.

    https://uploads.disquscdn.com/images/1a8d5db104bfc8fc9931112e7823008bf3acbe26ddd501e50abfa8f2ccc3c8fa.png

    • Tom Thompson

      Hi guys,

      Any advice on this will be helpful.

      Tom

      • moneyaware

        Hello Tom,

        Thanks for getting in touch. Sorry to hear the issues you’re having with your credit report.

        We would recommend contacting the company that provided this report to check to see if it is accurate. It would be very unusual for a creditor to try to reset a statute barred limitation, if you do not recall making payments on these dates (your balance seems to reflect that you didn’t) then it may be a mistake in the report that will need to be corrected.

        I hope this helps and you get the issue resolved, if we can help you with anything else please get in touch.

        Thank you

        Becca

  • RichM

    Hi,

    I have just received a call from debt collector chasing a debt from 2006. I last had contact with the creditor in 2007. Since then the creditor Welcome Finance has been put into default by the FSCS. I have had no contact with this company or any of its representatives or agencies since 2007 and the loan was subsequently removed from my credit file. Am i able to use the letter template to stop these attempts at collection even if the company is no longer operating?

    • moneyaware

      Hello Rich

      Thanks for your message.

      It sounds like your old debt with Welcome Finance has been sold your debt onto to a debt collection agency and that is why you are now receiving new communications after such a long time. However, based on the information you have provided it sounds as though the debt may be statute barred as it is older than 6 years, you can read more about statute barred debts here: https://www.stepchange.org/debt-info/can-i-write-off-debt/statute-barred-debt.aspx

      Statute Barred debts can still be pursued, however they are no longer enforceable by the courts and debt collection agencies have limited powers to pursue the debt. You can use the template letter to point out your position and get confirmation. It will then be down to the debt collector to provide proof the debt isn’t statute barred.

      I hope this answers your question fully please let us know if you have any further questions.

      Becca

  • Zoe

    hi,

    i have just checked my credit file and have had a CCJ appear on there which has been in force since 2014. This relates to a loan I had back in 2006 but have not had any contact with the creditor since 2007, i assumed this had been written off until i checked my credit file yesterday.

    I work for a financial institution and was approved for a mortgage in 2015, this CCJ has not shown up at all despite it being applied in 2014. I have spoken to the court who have advised the debt was sold to a collection company who instructed the CCJ, they claim to have tried to contact me but were sending letters to an address which i have never lived at, I am not a difficult person to find I have credit all they had to do was a credit search and they could’ve got my recent address.

    I feel this is very unfair as I did not have a chance to defend myself and the debt has also tripled in value which is ridiculous.

    How can i get this CCJ removed as this will affect my mortgage etc?

    Thanks in advance,

    • moneyaware

      Hi Zoe,

      If the debt was statute barred at the time that the CCJ was granted, this would be a suitable reason for having a CCJ set aside/removed.

      You’d need to check the criteria mentioned in the article to see whether the debt was already statute-barred, and if you’re sure this is the case you could apply to do this.

      I hope this helps,

      Rory

  • marxdrive

    Hi,

    I have a bill from my water company which has been growing every-year since my last payment in 2007.

    Where do I stand if the bill started during the statute barred time scale but has charges which were added in the last six years?

    Thank you for your time.

    • moneyaware

      Hi there,

      Without knowing more about the situation it’d be hard to know if this debt is statute barred.

      If you think the debt is statute barred, you could use the template letter in the article above to write to your creditor. If the debt is not statute barred – they’ll need to prove it.

      We’ve got more information about statute barred debts on our website:

      https://www.stepchange.org/debt-info/can-i-write-off-debt/statute-barred-debt.aspx

      I hope this helps,

      Jen

  • Jane taylor

    I have a debt from over 6 years ago with barclays bank from a joint account with my then husband who got into debt with it ..I opened a new bank account and banked with my new one and left him to get in debt with that one …a few months back I had a letter off debt collection asking me for the money a few thousand ..what can I do …2007/8 this account was and I’ve been divorced since 2010

    • moneyaware

      Hi Jane,

      If the account is in both names and remained this way, it would be the responsibility of both parties. Even if you divorced, this doesn’t cause a joint account to separate, and you may still be liable for the debt.

      I’d suggest reading our section on joint debts here:

      https://www.stepchange.org/debt-info/how-joint-debts-affect-me.aspx

      This will give you more information on what to do, and how to deal with these types of situations.

      Kind regards

      Rory

      • Jane taylor

        Thank you for the reply…does it make a difference that my ex husband had the account and when we got married in added my name to the account?..nothing has been paid on this account since 2007/8

      • moneyaware

        Hi Jane,

        If the account is in both names and stayed this way – it’ll still mean you’re liable for the debt.

        If you think the debt is statute barred you can use the template letter above to write to the creditor. It’ll be up to them to prove that the debt isn’t statute barred.

        Kind regards,

        Jen

  • Russ

    I had a secured loan with Welcome Finance taken out in 2007. Due to the exorbitant interest, the loan never seemed to go down and when I got into financial difficulties, I stopped paying in 2010. In 2012, the loan was sold on to another company and was been sold on again. Last year, I queried whether the third company had a right to the charge on my house, as it was still in Welcome’s name. For some reason they removed the charge. Does this mean the loan is now unsecured and as I haven’t paid anything and have disputed the debt for over 6 years, is it statute barred?
    Thanks

    • moneyaware

      Hi Russ,

      It would be difficult to give you an answer here, but I’d suggest looking into this further to find out what state the debt is in now.

      If a debt is statute barred, contacting the company to ask them for more information won’t cause the debt to become ‘unbarred’ so there’s no harm in asking. This way you’ll be able to discuss this wit them, and if the debt has now become statute barred you won’t be liable for any further action taken against you through the courts.

      Hope this helps,

      Rory

  • Melanie Allman

    I have an old catalogue debt from over 8 years ago which appears to have been passed from pillar to post and is now with another debt collecting agency but by their own acknowledgement “we have received no response to our previous attempts to establish contact you regarding the unpaid defaulted account” I’ve never acknowledged any letters from anyone. Is this covered on the statute barred please?

  • Kelly pearce

    My husband and I moved into a house last sept and from around November we have been receiving letters from Lowell saying he owes 289.27, from burtons.
    He hasn’t shopped from burtons since 10/11 years ago maybe more. He can’t recall owing any money either. We haven’t rang or acknowledged the debt but today received one saying, pre legal assessment.
    If he doesn’t pay it looks as though they are taking it to a county court and a ccj may be put on his file.
    I’m unsure what to do now. I would class this as statue barred but if we write to Lowell, is that him then acknowledging the debt?
    Need to go around this the correct way, please help.