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
  • BB

    I, like so many others, bought a summer home in Spain in 2006 but due to circumstance beyond my control, I stopped paying the mortgage in 2012.
    I have received no correspondence from the bank which changed name/hands in 2013 to either my home address nor the property address. Not 1 letter of correspondence regarding the mortgage or the fact that it has not been pain since some time in 2012.
    Has anyone come across a situation like this before and where do I stand with it. I visited the property this week and it has not been touched since my last visit in 2012. My key still works and my post dating back to 2012 was there.
    This is obviously a question about EU law and not UK law

    • moneyaware

      Hi Brendan,

      Thanks for posting.

      We wouldn’t be able to offer advice on property law – although this may be something Citizen’s Advice can provide you with help on.

      https://www.citizensadvice.org.uk/

      In terms of statute barred debts, in the UK, mortgage shortfalls can become statute barred however the timeframe for this is 12 years rather than 6. However the interest charged on this has a limitation period of six years.

      If you’re struggling with debts please feel free to give our Helpline a call for some advice:

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

      I hope this helps,

      Jen

  • Heather

    Hi, I had a credit card back in the days, last payment date was in June 2009 I thought i paid it off and left the country for few years. A year ago when I applied for mortgage with my fiance I have received a letter from debt collectors that I owe them 1025£ I have called them and said i do not remember having a credit card i na first place. It was ages ago. Few weeks ago they send me a statement where it shows last payment in JUne 2009. Is my debt statuted barred ?

    • moneyaware

      Hi Heather,

      If your debt meets the criteria above it may be statute barred.

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

      I hope this helps,

      Jen

  • Wayne Card

    Hello I believe I qualify for a statute barred debt under Scottish law as the account is in Scotland. Apparently I had an account that was left slightly overdrawn with an overdraft limit of £300. This has accrued interest over the last 18 years and I have now noticed a letter chasing me for the amount of £300.74. As no transaction has been made my myself or the joint account holder (who I have had no contact with for 18 years). Does the time frame start when the account reaches full overdraft limit or when the last transaction was made 18 years ago also do you have a template letter for Scotland banks and should I keep my appointment with an English branch of the bank to rectify the situation. Thanks

    • moneyaware

      Hi Wayne, thanks for getting in touch.

      If a debt was taken out in Scotland, and it’s been longer than five years since you acknowledged the debt in writing or made a payment towards it, then it’s likely to be considered ‘extinguished’ under the Prescriptions Act.

      It can be a bit complicated with overdrafts sometimes because there’s no fixed time when the overdraft needs to be paid back, but as it’s been 18 years since the account has been used, it may be worth sending the statute barred letter to the creditor to let them know you believe their right to pursue the debt has passed.

      Before you send the template letter, please look into whether this debt has ever been taken to Sheriff’s court or not (you can check this by looking on your credit file). If a debt goes to Sheriff’s court within a 5 year payable timeframe, it may not be classed as statute barred.

      When contacting the creditor, you can use the same template letter that people in England, Wales and Northern Ireland do for state barred debt.

      More details on what you can do are available on our website: https://www.stepchange.org/debt-info/can-i-write-off-debt/statute-barred-debt.aspx

      Kind regards

      Rachel

  • Tony Gibbs

    Hi,

    Just received claim form (CCJ) for an old overdraft debt (£1300). The debt account has declared me default on 12/02/2009 (as per my previously saved credit report info) and since has not received any payment or correspondence from me admitting liability. Therefore by law the debt account has automatically qualified for statute barred on 12/02/2015.
    Kindly can you please advise how do I now respond to the CCJ Claim form and what to write to the claimant in order to get it all resolved?

    P.S. There are no records of this debt account on my latest credit report file, assume it’s been fully extinguished.

    Many many thanks in advance for your time & suggestions!

  • Vekal

    Hi! I had an account showing on my Experian credit report as defaulted in 09 May 2013, however a CCJ was applied to my credit file on 28 Aug 2015

    I am confused as to what will happen, will the defaulted account disappear in 2019 and the CCJ in 2021? if the defaulted account disappears in 2019 is the CCJ still enforceable ?

    Very confused please help!

    • moneyaware

      Hi Vekal,

      Thanks for posting. Understanding credit files can be very confusing! Hopefully I can offer some help.

      The dates you suggest for things to drop off your credit file are right, the CCJ and default should both go away after six years from them being entered.

      When the record of the default goes away there will still be the record of the CCJ and any more recent information about that debt.

      Whether a debt is enforceable or not is a slightly different issue to whether anything is recorded on your credit file about it. The six year time limit referenced in the article above relates to the time creditors have to take legal action, as you’ve already got a CCJ for this debt the limitations period doesn’t apply. The debt will remain enforceable as they’ve got the CCJ in place to enforce the debt.

      I hope this makes sense. Please let me know if there’s anything you’re not sure about.

      Kind regards

      James

      • Vekal

        Hi James thanks very much for clearing that up! so does this mean that even after the CCJ is removed from my credit file / 6 years, or the debt is removed from my profile, the creditor can still chase me for the debt ?

      • moneyaware

        Hi Vekal,

        Apologies for the delay in replying.

        If there’s a CCJ in place before the limitations period runs out then they can continue to pursue you for the debt.

        Even if the CCJ has dropped off your credit history it will still exist, so the creditor can use it to enforce the debt.

        Kind regards

        James

  • kath

    hi ive had a letter saying i owe a 900 social loan via dwp from 17 years ago and going to stop it through my employer well im self employed and this debt was so many years ago. if i dont pay can bailiffs recover the debt? ive never responded to a letter from them.

    • moneyaware

      Hi Kath,

      If it’s over six years since the payment on the social fund loan became due then this debt would be classed as “statute barred”, it sounds like this debt is far over that six year limit.

      If a debt is statute barred it means your creditor shouldn’t take legal action to recover this debt, and you could defend it if they did. However, it’s still possible for a creditor to try and collect a debt without using the legal system, which is what’s happening in your case.

      The DWP don’t have to go through court to set up a deduction from your earnings through PAYE, but it sounds like this isn’t possible in your case.

      Bailiffs are usually sent because a debt has gone to court and you’ve not repaid it. As this debt hasn’t gone to court, I wouldn’t expect bailiffs to be sent.

      Another power that the DWP have to collect this kind of debt is to make deductions from benefit payments you receive from them. Obviously this only happens if you’re receiving benefit payments from them.

      I hope this helps.

      Kind regards

      James

  • May

    Hi I took out a mobile phone contract in Scotland in June 2010. I moved to England a month later and had no reception (even though when I took out the contract they assured me I would have excellent reception and even got me to purchase the dongle for internet). They agreed about internet contract and cancelled it but did not agree on the mobile phone as I could still use it outside. After lots of toing and froing I cancelled my payments in September and went into full dispute. In the end they sold the debt to a debt collector. Am I correct that as it took it out in 2010 in Scotland this debt is now Statute barred and won’t have to dig up all the paper work to argue again about it?

  • Craig Forrest

    Hi

    I have just received a letter from motormile finace. There was no information on the letter as to regarding what the debt was for and when it began. It did however mention that the statute of limitation period has passed. I called to find out what this was for as i had no idea. Turns out a payday loan from 8 years ago which tbh i probably took out but can’t remember i did use a few payday loans back then. I told him i have no recollection of this and asked for proof which he said he has bank statements. What is my next point of action as this debt is statute barred. We confirmed my phone number and address so are they now going to harass me? Thanks in advance

    • moneyaware

      Hi Craig,

      If a debt is statute barred, and the creditor have confirmed this, the debt will now be unenforceable and the creditor can’t take any further action against you to recover the debt.

      The rules on Statute barred debts state that creditors must not attempt to recover a statute barred debt (In England, Wales and NI) if the lender hasn’t been in contact with you during the limitation period, which is usually the last six years.

      However, if they have been in touch with you on a regular basis, they can continue asking you to make repayments towards the debt, but if the debt is statute barred they can only ask you to do this, they can’t enforce the debt through the courts.

      I hope this helps,

      Rory

  • Ben

    I have started receiving letters from the student loans company stating I owe them money. I set up a standing order to repay the over payment of a student grant in 2007-2008. After the February 2008 the standing order ended. eight years later according to them I missed two payments. How on earth can they wait nearly a decade to let me know I’m still in debt. Is my debt statue barred? Do they have the right to bombard me with letters after eight years of nothing?

    • moneyaware

      Hi Ben,

      I’d suggest using the statute barred template letter in the article above. This will mean the Student Loans Company will have to provide proof that this debt is enforceable.

      Kind regards

      James

  • Debi Norton-Brown

    I have received a County Court Claim claim for from a company called Howard Cohen and Co, claiming that I owe Barclaycard £6113 from 19/9/2010. I certainly don’t remember this debt, or receiving any correspondence regarding it. I have advised the court that I want to defend the claim as I believe it to be statute barred, but I’m not sure what to write in my defence to the court can you advise please?
    Thank you

    • moneyaware

      Hi Debi,

      There’s lots of useful information about statute barred debts on our main website, here: https://www.stepchange.org/debt-info/can-i-write-off-debt/statute-barred-debt.aspx.

      The relevant section for you is towards the bottom of the page, about responding to court action once the limitation period has passed. The important thing is to make clear in your defense that you believe the debt is statute barred.

      Kind regards

      James

  • paul

    i left the UK in 2002 , and ran up some credit card bills, in the region of 25k spread over 3 cards and i guess i defaulted late 2002 when i stopped making payment , i have had no correspondence with any of the companies since either written or oral, i have recently moved back to the UK and I am looking to buy a place, based on this circumstances should i be worried or will the banned statute apply? any advice appreciated.

    • moneyaware

      Hi Paul,

      Obviously I don’t know all the details in this case, but it sounds like these debts are statute barred.

      It’s possible that the companies you owed money to will still have records of these unpaid debts. If they’re statute barred then they’re unlikely to ask you for payments, but they could refuse to offer you further credit if you applied to them again.

      If any of your previous creditors do start asking you for payments then the article above gives instructions on how to respond, as well as a template letter you can download and send to them.

      Kind regards

      James

  • Katherine

    I received a parking penalty 6 years and one month ago, and never had any contact with the company trying to enforce the penalty as at the time, every bit of advice I read about them, Excel Parking, was that their penalties were not enforceable at all. Over recent weeks, the landlord of my former address has said he has received letters from BW Legal who are now chasing the ‘debt’ and threatening court action. Is this kind of debt stature barred now that it’s more than 6 years since the ticket was issued? I’m loathed to pay them anyway, given that I disputed the validity of the ticket at the time it was issued, but obviously the last thing I want is a CCJ turning up against me. Any help would be most gratefully received.

    • moneyaware

      Hi Katherine,

      Thanks for posting.

      It’s hard to be certain without knowing all the details, but it sounds like this debt may be classed as a “simple contract”, which would mean there was a six year limitation period. That six year clock would start from the point the payment was due, so possibly a while after the date the ticket was issued.

      I can understand completely that you’d want to avoid a CCJ over this kind of thing, so I’d recommend giving us a call and we can give you advice about this and any other debts you may have to deal with. Here’s our contact details: https://www.stepchange.org/Contactus.aspx.

      Kind regards

      James

  • Philip Connolly

    I am being chased for debts that are actually no longer on my credit file. I was paying until recently when I found out the debt was originally statutory barred, can the debt agency enter this old debt back onto my credit bureau report after all this time please, even I was tricked into paying?

  • Philip Connolly

    Can defaults that have been removed from credit file be put back on if I have been paying the debt collection agency for over 14 years? and they are no longer on the file

    • moneyaware

      Hi Philip,

      You should only receive a default for a debt once, so if your original default has gone from your credit file you shouldn’t receive a new one for the same date at a later date.

      I’d suggest contacting the company that added this default and explaining the situation. It may be that they didn’t have records of the original default.

      There’s more information about this on our main website here: https://www.stepchange.org/debt-info/debt-collection/default-notices-and-missed-payments.aspx.

      Kind regards

      James

  • Philip Connolly

    Thank you

  • Curtis

    Hi,
    I had several debts in my student days. I believe based on my credit file the outstanding default amount would expire in Feb 16 (6 Years). I have recently checked my credit file again (Nov 16) and my credit score has dropped to very poor. I now have a CCJ applied to my account as of April 2015. Can they apply a CCJ with no correspondence to me? Should this debt now be statute barred as it is over 6 years from any contact? Can I get this judgement over turned?

    • moneyaware

      Hi Curtis,

      You can’t receive a CCJ without being sent correspondence, the first stage involves the court sending documents out, then they’ll sent confirmation of the judgment once it’s been set.

      More often correspondence is sent to the last known address of the person in debt, which might not be up to date, meaning they don’t receive it.

      If the CCJ was set in April 2015 and the debt wasn’t due to become statute barred until February 2016 then the debt wouldn’t have been statute barred at the time the judgment was made. So you wouldn’t be able to have the judgment set aside on the basis of it being statute barred.

      There’s more information about setting aside a CCJ on our main website under the heaing “Cancelling a CCJ”. Here’s the link: https://www.stepchange.org/debt-info/ccj/dealing-with-a-ccj.aspx

      If you’d like advice on how to deal with this debt and any others you may have then please feel free to get in touch with us. Here are our contact details: https://www.stepchange.org/Contactus.aspx.

      Kind regards

      James

  • Ronald Gray

    Hi there.
    If the time bar is 5 years in Scotland for debts can I legally ask it to be removed from my credit file after the 5 years not 6?

    • moneyaware

      Hi Ronald,

      Unfortunately not. Even though the ‘prescription’ period is 5 years in Scotland, information about your debts will still remain on your credit file for 6 years.

      Rory

  • Billie

    Hi I live in Scotland and when i was younger build up debt such as credit card, store card (Very) Mobile debt ( from something i dont remember) and have a CCJ, I have not been incontact with any of these debitors but i did call my CCJ to make a payment plan and they took my bank detail last year but have never took any money?
    I understand from posts below about they cant take you to court for payment after 5 years? my debts defaulted in 2011 and so its now been 5 years and will be 6 in May 2017 which i understand will then be cleared from my credit score?

    If i put my name on the voters roll will i then be chased for the money again?
    I had build this debt when i was 17 and living away from home and now i want to try build my credit score to try apply for a mortgage in the future.

    I paid back one of my debts september this year will this still affect my credit score also?

    • moneyaware

      Hi there,

      In Scotland, debts become unenforceable after a period of 5 years, after which your creditors can’t take action and the debts are ‘written off’. Until 5 years has passed creditors can still take further action and you’re still liable for your debts. The 5 year period isn’t related to how long debts show on your credit file, as this shows for a maximum of 6 years, regardless of your situation.

      We can’t say with any certainty what would happen if you updated your details, but if you’re still liable for your debts there’s a risk that they will contact you, or take further action. As a debt advisor I’ve seen situations where people have left debts and nothing has happened, but also where further action has been taken which often leads to a difficult situation. This is why we wouldn’t recommend avoiding debts, as it can sometimes make a bad situation worse. However this is your choice.

      Importantly, your credit file isn’t permanent and anything that is added will only show for a maximum of 6 years. If you have a CCJ then this debt won’t become unenforceable, so you may want to look at dealing with this even if it isn’t showing on your credit file.

      If you need any help, please contact us by visiting http://www.stepchange.org/contactus.aspx

      Kind regards

      Rory

  • Teresa Casey

    After checking my credit report it appears that a debt collection agency has registered a default on my file for a statute barred debt. The debt occured in November 2010 but they appear to have the default date as January 2015. I have written to them using your template as they have been sending letters and threatening doorstep collection. Is there a letter i can send to them to get this removed from my credit report? Thanks

    • moneyaware

      Hi there,

      In Scotland, debts become unenforceable after a period of 5 years, after which your creditors can’t take action and the debts are ‘written off’. Until 5 years has passed creditors can still take further action and you’re still liable for your debts. The 5 year period isn’t related to how long debts show on your credit file, as this shows for a maximum of 6 years, regardless of your situation.

      We can’t say with any certainty what would happen if you updated your details, but if you’re still liable for your debts there’s a risk that they will contact you, or take further action. As a debt advisor I’ve seen situations where people have left debts and nothing has happened, but also where further action has been taken which often leads to a difficult situation. This is why we wouldn’t recommend avoiding debts, as it can sometimes make a bad situation worse. However this is your choice.

      Importantly, your credit file isn’t permanent and anything that is added will only show for a maximum of 6 years. If you have a CCJ then this debt won’t become unenforceable, so you may want to look at dealing with this even if it isn’t showing on your credit file.

      If you need any help, please contact us by visiting http://www.stepchange.org/contactus.aspx

      Kind regards

      Rory

      • James

        Hi
        I have a debt where creditor got a Decree against me in 2011. I today have received a letter confirming from them that the debt is now statute barred and that they are not actively chasing this debt??!!
        Can they chase me in future claiming they made a mistake in their correspondence. FCA clearly states that a company cannot mislead a customer etc…
        So where do I stand with this?

      • moneyaware

        Hello

        In order to answer your question fully we would need more information, however in general terms if a decree is in place – a debt is not able to become statute barred.

        It may be that that have made an error issuing a letter stating that the debt is now statute barred, so we advise keeping this for your records. If in the future, if they continue to pursue the debt then you may have a case for a formal complaint.

        Thank you

        Becca

      • James

        Thanks Becca
        What information will you need form me? Could you advise whom I would make the formal complaint to and the potential outcomes of the complaint?
        Thanks

  • Gill

    I had a car loan around 1999 missed a few payments & they took the car back I thought that was the end an agency has contacted me & worried what will happen now

  • Dave

    I am slightly confused regarding the statute-barred time-frame. Does it start from the time of “payment due” or from the date of default?

    For example, i had a credit card with Nationwide where the last payment was made Nov 2010 and thus the next “payment due” was December 2010. A default was put on my credit file July 2011. If the time-frame starts when payment was due (December 2010) would this mean the statute-Barred status should come into effect December of 2016 (next month), or July 2017?

    I hope you can clear this up.

  • James

    Hi
    I have a debt where creditor got a Decree against me in 2011. I today have received a letter confirming from them that the debt is now statute barred and that they are not actively chasing this debt??!!
    Can they chase me in future claiming they made a mistake in their correspondence. FCA clearly states that a company cannot mislead a customer etc…
    So where do I stand with this?

    • Becca Drury

      Hello

      In order to answer your question fully we would need more information, however in general terms if a decree is in place – a debt is not able to become statute barred.

      It may be that that have made an error issuing a letter stating that the debt is now statute barred, so we advise keeping this for your records. If in the future, if they continue to pursue the debt then you may have a case for a formal complaint.

      Thank you

      Becca

  • Paul mcgoran

    I have just received a letter from a company saying they have taken over a debt from a finance company and I owe £4000 I believe this was a car my ex wife had and handed back 11 years ago. Am I still liable to pay this.