Advice Column – I’ve been told that if a debt is over 6 years old it can’t be enforced.
Time limits for recovering debt in court – statute barred debt
There are time limits on when some creditors can go to court to get you to pay an old debt. If the time limit has passed, the debt is known as ‘statute barred’ – it means that the creditor can’t get a court to force you to pay the debt, and they shouldn’t keep chasing you once you’ve asked them not to.
This applies to debt that you have from sources such as:
- credit cards
- personal loans
- store cards
- bank loans
- finance company loans
- utility bills (electricity, water, gas etc)
There are different rules for debt you might have from other sources, eg tax, benefits overpayments or mortgage shortfalls. The National Debtline has useful information on the time limits for other types of debt (www.nationaldebtline.org).
Statute barred debt
The debt will be statute barred if you, someone representing you, or someone else you held the account with (eg your partner) haven’t:
- made a payment in the last 6 years
- written to the creditor acknowledging that you owe them money in the last 6 years
- had a county court judgement (CCJ) against you for the debt in the last 6 years
The limit is 5 years if you were living in Scotland at the time when you first took out the debt.
A statute barred debt doesn’t disappear. But if a debt is statute barred the creditor can’t get a court to force you to pay. The debt could affect your credit rating, making it harder for you to get credit or a loan in future.
Be careful when dealing with statute barred debt – if you or someone acting for you make a payment or write to the creditor to acknowledge the debt, the time limit will reset and the creditor will be able to go to court to make you pay. A telephone call is not an acknowledgment of the debt so this may be the best way to contact the creditor initially.
What to do if you’re chased for a statute barred debt
There are rules and guidance for England, Wales and Northern Ireland that say:
- a creditor mustn’t demand payment for statute barred debt if you say you won’t be paying the debt because it’s statute barred
- a firm shouldn’t threaten you with court action if the debt is statute barred, because court action is not actually possible
- a firm mustn’t try to recover a statute barred debt if they haven’t been in contact with you during the time limit
You can get help from your nearest Citizens Advice or the National Debtline if you want to make sure the debt is statute barred – they can also give advice if a creditor is chasing you.
National Debtline Telephone: 0808 808 4000
You can contact the creditor yourself, but you need to be careful. If you write to them and acknowledge that you owe them money (eg by offering them a part payment), the debt will no longer be ‘statute barred’.
Use the National Debtline’s template letter to write to the creditor to get them to stop contacting you. The template letter is written in a way that you can tell the creditor to stop contacting you without you acknowledging that you owe them money.
It’s a good idea to send the template letter by recorded delivery, because you’ll be able to prove that the creditor got the letter.
If the creditor says that the debt it not statute barred, it’s up to them to go to court and prove it. You can get help from Citizens Advice or the National Debtline to make sure the debt is statute barred.
If you disagree with a court judgement against you
You could be in a situation where you have a county court judgement against you for debt that you think is statute barred.
You can ask the court to ‘set aside’ (ie overturn) the judgement if you disagree with it.
You can still pay the debt if you want to
The rules on statute barred debt don’t actually make the debt go away. All they do is prevent a creditor from going to court to get money from you.
If you know that you owe them money, and you can afford it – you can choose to pay them back when you’re able to. This will probably be good for your credit rating, which means it might be easier for you to borrow money or get credit in the future.