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.

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.

You can read more about statute barred debts on our website.

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
  • sean howlett

    Hi,

    Hope someone can please advise. had a call from a company called Global Debt Recovery reference to an account myself and my ex-wife had and was closed by the Bank of Lloyds in 1996 as no payments were made, they have also added a £245 interest for an account they closed. All i have asked for is a letter to be sent to me to confirm payments if i want to pay is this legal or can i fight against the payment?

    • moneyaware

      Hi there Sean, thanks for posting.

      As this debt is very old and you haven’t made a payment in this time, it may fall under the criteria for a statute barred debt, as outlined under the Limitations Act. A creditor has six years from the last payment made to establish a payment plan with you or take the debt to county court. If they don’t manage to do this within the six year timeframe, the debt is no longer enforceable. It’s still outstanding, and you do still technically owe the money. It may even still show up on your credit file. All the Limitations Act does is prevent action after the allowed six year timeframe.

      If this debt hasn’t yet been taken to county court, and there’s no history of payments on the debt from you or your partner, then it might be a good idea to follow the procedure in the blogpost above. As long as the letter you previously sent did not in any way state that you were ever liable for this debt, you may still be able to send the statute barred letter this blogpost links to. Once this is sent, if the creditor can’t produce proof of the debt, the last payment made, or that a County court judgment was granted, they should stop contacting you. If they do contact you again without proof of the debt, you can then escalate your complaint to the Financial Ombudsman.

      I hope this helps

      Kind regards

      Rachel

  • Kelly

    Hi, I was wondering if anyone can help. My partner has received a CCJ off a company called Cabot financial, who were chasing a debt off 14 years ago can he contest it with it being so old.

    • moneyaware

      Hi Kelly,

      If the debt fits the criteria listed in the article above, it may be statute barred.

      If a creditor starts court action after the limitation period has passed, the fact that the debt has become statute-barred or extinguished gives you a defence.

      If court action has already started and you’ve received a CCJ, you may be able to get this cancelled later, but this can be difficult and there may extra court fees to pay.

      Filling in court forms for a statute-barred or extinguished debt can be more complicated than normal, and there’s a possibility you may need to attend a hearing if the court needs more information. If you come to us for advice, our debt advisors should be able to offer you support with this.

      You can find out more about filling in CCJ claims forms here:

      https://www.stepchange.org/debt-info/ccj/court-claim-form-process.aspx

      You can find out how to get in touch with us here:

      https://www.stepchange.org/Contactus.aspx

      I hope this helps,

      Jen

      • Kelly

        Thank you for your advice, we’ll look into it.

  • Tee Reynolds

    Hi hoping you can advise me I took a phone contract out for my son (bad move )about 11 years ago he was paying it monthly but then lost his job so payments stopped and I was then left with the outstanding bill Lowell Finance they have been constantly sending me letters I know I should have paid it but at the time I was unemployed and has a lot going on with family issues I did move home and they are still constantly sending me letters demanding the debt of 625.69 even offering to pay 375.41 and I clear the remaining!!
    This debt is pretty old am I in the category for stutus barred if so I will download the letter and send it to them 😠

    • moneyaware

      Hi Tee,

      Thanks for getting in touch.

      If the debt meets the criteria above it may be statute barred.
      We have more information about statute barred debt on our website here:

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

      If you think the debt is statute barred it’ll be up to the creditor to prove otherwise.

      If the debt isn’t statute barred and you’re worried about the impact paying it off will have on your finances, please
      feel free to give our Helpline a call for advice. Our advisors can offer free and impartial advice on how to deal with it.

      You can find out how to get in touch with us here:

      https://www.stepchange.org/Contactus.aspx

      I hope this helps,

      Jen

  • Tee Reynolds

    Hi hoping you can advise me I took a phone contract out for my son (bad move )about 11 years ago he was paying it monthly but then lost his job so payments stopped and I was then left with the outstanding bill Lowell Finance they have been constantly sending me letters I know I should have paid it but at the time I was unemployed and has a lot going on with family issues I did move home and they are still constantly sending me letters demanding the debt of 625.69 even offering to pay 375.41 and I clear the remaining!!
    This debt is pretty old am I in the category for stutus barred if so I will download the letter and send it to them 😠

    • moneyaware

      Hi Tee,

      Apologies about the delay in replying.

      It’s hard to know for sure, but if you’ve not made a payment or acknowledged the debt in writing in the last six years then it’s possible the debt is statute barred.

      You can use the template letter above and if the debt isn’t statute barred the company will provide you with evidence to prove why the debt is still enforceable.

      Kind regards

      James

  • Karl

    Just got a letter from Cabot saying that I owe 94 euros!! I cancelled the direct debit from 3G Ireland broadband and they didn’t sent me any letter. Can I prosecute 3G for disclosure of my data to a third party???

    • moneyaware

      Hi there,

      It sounds like this question relates to consumer contracts in Ireland, which I’m afraid I don’t know very much about. I know in the UK it’s fairly standard for debts to be passed to a third party for debt collection but I don’t know how things work in Ireland. It may be worth checking the small print on your original contract to see if there’s anything about passing your information to other organisations.

      Kind regards

      James

  • roberto

    A company called Capequest has sent a letter that was claming that i owe £ 8k and he was passed the debt on from another debt collection agency. I have actually a debt of similar amount that i have a plan in place to pay back and i thought this was now passed on to Capequest. I therefore registered on their website to work a plan for payment but i realised that this about a debt which goes back in 2005 and for which a never made any payment. my question is : does registering on their website and try to workout a plan means admitting the debt? I never confirmed anything in writing and nor made any payment.

    • moneyaware

      Hi Roberto,

      It’s very unlikely that this would mean that you’d be admitting the debt as it’s usually written acknowledgement or payments towards a debt that do this.

      It’s also important to know that once a debt become statute barred, it can’t become ‘un-barred’ if you make a payment or even acknowledge the debt after 6 years has passed. So if you’re certain that the debt is statute barred then this shouldn’t have any impact on you.

      I hope this helps,

      Rory

  • Toni

    So I recently logged on to my clear score account to see my short and long term debt were £0 and my score is stable and ready to rebuild. What does this mean? I had around £10k in debts from current accounts, credit card, store card and pay day loans. I have ignored any letters and not acknowledged anything for the last 6 years or slightly more I honestly don’t remember. I am not proud of this I will add, I have just never been in a position to pay anything until now, hence the reason I logged on. Where has my debts gone?? Am I now in a position to start again and hopefully get a mortgage one day ???

    • moneyaware

      Hi Toni,

      Information will usually only appear on your credit file for 6 years, after which it ‘drops off’ your report. This doesn’t mean debts are written off though, and the rules around statute barred debts aren’t linked with what shows on your credit file.

      If you’re ever unsure about whether the information on your report is accurate or you have questions, the best place to find information is with the credit reference agency themselves.

      I hope this helps,

      Rory

  • Lexie Star

    tricky, yeah?

  • Kirstie Mac

    I have been receiving letters from capquest re my old student loan. I have not made any payment toward this EVER as it was deferred (i left college in 1996!)
    Is this likely to be a barred debt or are the rules different? I am in Scotland
    Many thanks

    • moneyaware

      Hi Kirstie,

      If your student loan was an ‘old style’ (pre 1998) loan, these are covered by the Limitation Act which governs statute barred debts, and a six year limitation period applies (5 years in Scotland)

      However, if you’ve applied for deferment, this counts as a written acknowledgement of the debt, which is one of the reasons that can prevent a debt from becoming statute barred, as in the article above.

      So whether the debt has become statute barred depends on whether you’ve deferred payments and whether the creditor has taken any further action against you to recover the money.

      I hope this helps,

      Rory

  • Alan D

    Hi: Similar question to that of Kirstie: I took out student loan in 1997, made some payments a few years later then stopped because income level dropped. I have made no payment or acknowledged the debt for around 12 years. Please can you advise me of my situation?

    • moneyaware

      Hi Alan,

      Old-style student loans (pre 1998) are covered by the Limitation Act, so it could be that if the creditor hasn’t taken any action and you haven’t acknowledged or deferred the payments that the debts have become Statute Barred.

      Kind regards

      Rory

      • Alan D

        Hi Rory: many thanks for this…encouraging!!

    • stocko

      I had a student loan from the same year and got in touch with Erudio yesterday. The told me that while my loan was still on file, it was now statute barred and, legally, I didn’t have to pay anything towards it now.

      • Alan D

        Thanks stocko, good to know this

  • Daine

    I am being harrassed by Moorcroft over a 11yr old debt. I have checked my credit file and there’s nothing on there. I have sent them the statue barred letter as I haven’t had any dealings with this in 8yrs (since I split with my ex). Initially they said they would put a hold on all this and investigate. They have now come back and said I sent the original debtor a cheque 5 yrs ago?? So the debt isn’t statue barred. I have responded asking for proof as I have never held a cheque book let alone sent anyone one!! They have now replied saying the original debtor has gone out of business so they can’t chase this cheque but they believe it was received and I must pay or i will have debt collectors on my door!! What do I do from here?

    • moneyaware

      Hi Daine,

      Thanks for getting in touch.

      If you believe the debt is statute barred it’s up to the creditor to prove otherwise and this includes providing evidence of the payment made.

      If they’re unable to do this and still claim the debt isn’t statute barred, you could make a complaint. If you do this and you’re unhappy with the response you receive from the creditor you can escalate it to the Financial Ombudsman.

      I hope this helps,

      Jen

  • Sara Bates

    My husband has a few debts from when he was younger, most of which he is paying via a payment plan one of which is a barclays credit card, this is being managed by a debt company. He he also had an overdraft with barclays which he decided to ignore (I know bad move!) in the hope it would go away. Barclays have been sending him an annual statement to his parents address for the overdraft but haven’t actually chased him for the money. I will check on the last date he made a payment but if it’s not been 6 years it will be coming up to that.
    Will the credit card debt and overdraft be treated separately even though they are with the same bank.
    And will the overdraft now be statute barred if it has verb 6 years?

    • moneyaware

      Hi Sara,

      Thanks for posting.

      The credit card debt and overdraft debt will be treated separately when working out if they’re statute barred.

      In terms of the overdraft, any money put into the account will be treated as a payment towards the overdraft. If no payments have been made and the debt fits the above criteria, it may be statute barred. You can read more about statute barred debts on our website here:

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

      I hope this helps.

      Kind regards,

      Jen

  • Susana

    Hello!!
    I recently received a letter from a lawyers office judgment stating I owe more then $7000.00:( I never owed so much in a credit card, when I was younger I had one for $2000 – $2500 not more which has increased enormously. This was around 8 to 9 years ago when I made my last payment. This is the first time hearing about this old debt which I know I owe the $2000 and willing to pay but not pay all the interest they are adding. Please help, what should I do ? Does this fall as Statue Barred?
    Thank you very much!
    Susan

    • moneyaware

      Hi Susana,

      You’ve mentioned Dollars in your question above, which suggests you’re referring to debts outside of the UK.

      Unfortunately we’re not able to provide advice to people outside of the UK as the laws around this are different.

      I’m sorry we can’t offer any further help.

      Kind regards

      Rory

  • Shaun Tipple

    Hello, i have an old credit card that had a limit of £250, i have just received a court summons for £459 plus court costs for the county court.

    it says that this was dated on or around the 03 march 2008. now its at court stage can i write the letter for statute barred as the case has not been heard yet.

    what am i supposed to do as i thought i had paid it off before i moved abroad for 5 years and i have been back 3 years and this is the first i have heard of it. it is on my credit file and says it has until march 2017 before it is void i don’t think this is right.

    any help would be great

    • moneyaware

      Hi Shaun,

      Thanks for getting in touch.

      If you’ve received a County Court claim, it’s important to reply to the claim within the time frame given.

      If the debt meets the criteria listed in the article above, it may be statute barred and you may be able to defend the claim.
      We’ve got information about how to do this on our website:

      https://www.stepchange.org/debt-info/ccj/court-claim-form-process.aspx

      If you believe the debt is statute barred, you could also send the template letter to your creditor, as well as replying to the claim.

      I hope this helps,

      Jen

      • Shaun Tipple

        thanks Jen,

        I have completed the online form stating that this is statute barred at moneyclaim.gov.uk.

        i am now printing off the letter to send to the creditors.

        as i am defending the CCJ will i have to attend court or will my statement be enough to prevent the court case from going forward?

      • moneyaware

        Hi Shaun,

        On the .GOV website it says “The court will decide whether you owe the money or not. You might have to give more information at a hearing. The court will tell you when and where the hearing will take place.”

        https://www.gov.uk/respond-to-court-claim-for-money/defend-the-claim

        So whether you need to attend court will be decided by the courts and they’ll let you know which court – usually one that’s nearby.

        Kind regards

        James

  • Rusty Shackleford

    Hello,

    I had a debt of nearly £400 with Nationwide from 8 years ago. I have not acknowledged or made a payment since, so I am confident that this debt is statute barred. It was on my credit report for years and eventually dropped off a couple of years ago.

    Just recently, I applied for a mortgage through an Independent Financial Advisor. They applied for a Mortgage in Principle with a couple of lenders on my behalf which included Nationwide (I didn’t know this at the time).

    My application was referred to Nationwide Head Office and this old debt was flagged up. Perhaps surprisingly, they then agreed the mortgage in principle.

    This morning, I checked my Experian Credit Report again and my score had decreased from ‘Excellent’ to ‘Very Poor’. Why? Because Nationwide had added the old account to my credit report with the status of ‘Default’ and a date in June!

    The mortgage still needs to be fully approved (although I’ve read that the credit check has already been done).

    So I’m unsure how to handle the situation at the moment!
    Any advice would be gladly received!

    • moneyaware

      Hi there,

      Thanks for posting.

      It sounds like it would be a good idea to contact the credit reference agency and ask them to look into this for you.

      Only one default should ever be added to your credit file and this is usually applied at or around the time the original debt defaulted as per the original credit agreement. Creditors shouldn’t add a further default once this has already happened.

      Experian, Equifax or Call Credit (the three main reference agencies) should be able to provide assistance with this and hopefully resolve the situation.

      Depending on the situation, we’re not sure if this separate issue would affect your mortgage application but Nationwide should be able to discuss this with you.

      I hope this helps,

      Rory

      • Rusty Shackleford

        Thankyou very much for your reply – I have contacted Experian for assistance.

  • stocko

    Hello,

    I’ve got a few debts that are now statutory barred, including my student loan. As they don’t show up on my credit report, do I have to declare these on a mortgage application and, if so, how will they affect the lender’s decision?

    Thanks in advance.

    • moneyaware

      Hi there Stocko, thanks for posting.

      Once a debt becomes statute barred, they are still outstanding and you do still technically owe the money. The statute barred part means that the six year timeframe between now and the last payment made has passed. This means that the creditor can no longer enforce the debt through county court.

      In regards to credit applications and how you should address them, it may be best to speak to one of the three credit reference agencies – Equifax, Experian or Call Credit – about your options.

      Kind regards

      Rachel

  • Nathan

    I’ve just had a letter from the ceditors solicitor saying ive got ten days to get in touch or going to the courts, but the letter from the solicitor was sent seven days ago, can I send the statute barred letter by email?

    • moneyaware

      Hi there Nathan, thanks for getting in touch.

      We would recommend that you sent the Statute Barred letter to
      the creditor by post. Getting proof of postage can work as extra assurance that you posted the letter should it ever be questioned by the creditor.

      In regards to the debt being statute barred, if there’s been a
      payment on this debt within the last six years, or this letter has arrived within a six year timeframe of the last payment made, then the debt isn’t likely to be considered statute barred.

      The Limitations Act prevents creditors from taking action
      through County Court once 6 years have passed since the last payment made or they haven’t attempted to contact you to make payment in that time. It doesn’t cancel the debt and you would still technically owe it, but they would not be able to seek further enforcement against you.

      Hope this helps.

      Kind regards,

      Rachel