Statute-Barred Debts: When a Debt Becomes Unenforceable

A debt is "statute-barred" when the creditor has run out of time to take you to court to recover it. The debt still exists — you technically still owe the money — but the creditor can no longer use the legal system to force you to pay.

The rules are set out in the Limitation Act 1980. The key limitation periods are:

• 6 years for simple contract debts (credit cards, personal loans, overdrafts, unpaid invoices) — Section 5
• 6 years for tort claims (e.g. claims for damages) — Section 2
• 12 years for debts under a deed or specialty (some mortgages, some formal loan agreements) — Section 8

The limitation period starts from the cause of action — the date you breached the contract by failing to pay. In practice, this is usually:

• The date a payment was due and not made (e.g. the date an invoice became overdue).
• The date the creditor demanded repayment (for debts payable on demand, like overdrafts).
• The date of the last payment you made towards the debt.
• The date you last acknowledged the debt in writing.

The critical point: the clock restarts if you make any payment (even a small one) or if you acknowledge the debt in writing (Sections 29 and 30 of the Limitation Act 1980). A verbal acknowledgment does not restart the clock.

Be very careful about these actions if you believe a debt may be close to becoming statute-barred:

• Making any payment — even £1 towards the debt restarts the 6-year clock from the date of that payment.
• Written acknowledgment — signing a new repayment agreement, writing a letter saying "I know I owe this money", or filling in a financial statement for the creditor can all restart the clock.
• Part-payment through a DMP — if you are paying the debt through a Debt Management Plan, those payments restart the limitation period.

Things that do not reset the clock:

• The creditor sending you letters or calling you.
• Verbal conversations about the debt (unless you make a payment or sign something).
• The debt being sold to a debt collector — the limitation period is not affected by assignment.
• A creditor recording a default on your credit file.

If a creditor issues a court claim for a debt you believe is statute-barred, you must file a defence within 14 days (or 28 days if you file an acknowledgment of service). Do not ignore it — if you do not respond, the court will enter default judgment against you even if the debt is statute-barred.

In your defence, state clearly that the claim is statute-barred under the Limitation Act 1980 and provide the date you believe the limitation period expired. The burden of proof is on the creditor to show that the debt is still within the limitation period.

If a debt collector contacts you about a very old debt (but has not issued court proceedings), you can write to them stating that you believe the debt is statute-barred and that you do not intend to make any payment. Be careful not to acknowledge the debt or make any offer of payment in your letter.

The limitation period and the credit file reporting period are separate things:

• Defaults and CCJs are removed from your credit file after 6 years — but this is 6 years from the date of the default or judgment, not from the date the debt became due.
• A debt can be statute-barred but still showing on your credit file, or vice versa.
• Once a default is more than 6 years old, the credit reference agency must remove it regardless of whether the debt has been paid.

If a debt collector reports an old, statute-barred debt to a credit reference agency as if it were a new default, this may be a breach of data protection law. You can complain to the credit reference agency and, if necessary, to the Information Commissioner's Office (ICO).

This guide provides general legal information about UK law and is not legal advice. Laws and regulations change, and individual circumstances vary significantly. For advice specific to your situation, you should consult a qualified solicitor.

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