There are different rules about when debts become statute barred in different parts of the UK. This guide explains about statute barred debts in England and Wales. We will explain when debts become statute barred debts and how to deal with creditors and court action after time limits expire. 

Use this guide to:

• find out which time limits apply to which debts;
• find out when a time limit starts running on a debt;
• deal with creditors chasing you for old debts; and
• deal with court action for debts past their limit.

The sample letter mentioned in this guide can be filled in on our website.

What is the time limit for collecting debt?

Under the Limitation Act 1980, unsecured credit debts, such as credit cards or personal loans, become statute barred after six years. The rules on when you start counting the six years depend on the type of debt being collected. There are also some things that can stop or restart the clock. For different types of debt, the creditor may have less or more time to start a claim.  

But if you have stopped making payments on a debt, the law will usually only give your creditor (the person, company or organisation you owe money to) a set amount of time to take court action to recover the debt. If the creditor has run out of time, your debt is a statute barred debt.  

The Limitation Act 1980 sets out the rules on how long a creditor has to take certain action against you to recover a debt in England or Wales. The time limits do not apply to all types of recovery action. 

This guide explains when you can use the Limitation Act. Limitation periods for debts are important because if the creditor has run out of time, you may not have to pay the debt back. For example, if a credit card debt is statute barred, you may be able to choose not to repay it. The Limitation Act is sometimes called the statute of limitations.

What does ‘statute barred’ mean?

If a debt is barred under statute, it means that by law the lender has run out of time to use certain types of action to try to make you pay the debt. The Limitation Act 1980 sets the time limits for most debt in England and Wales.

While your debts could become statute barred after six years, this does not mean the debts no longer exist. In some circumstances, the creditor or a debt collection agency can still try to recover money from you. You can also choose to pay if you wish. For many types of debt, you can also tell a creditor to stop contacting you if the debt is statute barred and that you are not going to repay it.

Even if you have a statute-barred debt, it may still be shown on your credit reference files. This may make it harder for you to get further credit. For more information about out how long information can stay on a credit reference file, see our Credit reference agencies guide.

When do debts become statue barred?

This depends upon the type of debt you have. We cover the main types of debt in this guide. We’ll explain when the clock will start running and how long it needs to run for. For example, for some kinds of debt a default notice may need to be sent before the clock can start. If your type of debt is not included in this guide, contact us for advice so we can tell you about the rules that apply to it. 

When does the limitation period start running?

Whatever the limitation period is, for example six or  twelve years, it is important to understand exactly when the time limit started. Under the Limitation Act, time starts to run from the ’cause of action’. This is not the same for all types of debt, so be careful. In this guide, we look at the cause of action for the main types of debt. If your debt is not included in this guide, contact us for advice.

A payment or acknowledgment of a debt might restart the time limit. You can acknowledge a debt by contacting your creditor in writing, but it will depend on what you say and how you have contacted them. The rules for payment and acknowledgment are not the same for all debts.  

Unsecured credit debts

Unsecured credit debts are things like credit cards, store cards, personal loans and catalogues. Most credit debts have to be made using the rules set out in the Consumer Credit Act 1974. When using the Limitation Act, these debts are often called ‘simple contract debts’.

The Limitation Act says that the limitation period for simple contract debts is six years.

The cause of action (when the limitation period starts running) for simple contract debts is usually when your agreement says the creditor is able to take court action against you. With some agreements, this will be after a default notice has been sent to you and then expired.

If your creditor didn’t issue a default notice soon after you missed payments, or if they no longer have any record of whether they ever issued a default notice, contact us for advice.

Once the limitation period is running, a simple contract debt will normally be statute-barred if:

• the creditor has not already started a county court claim for the debt; and
• you or anyone else owing the money (if your debt is in joint names) have not made a payment towards the debt during the last six years; and
• you have not written to the creditor admitting you owe the debt during the last six years.

How do I prove my debts are statute barred?

Once you have told the creditor or debt collection agency that you are disputing the debt because you think it is statute-barred, it is up to them to prove otherwise.  Don’t be afraid to ask for evidence if they tell you a payment has been made, or a letter has been received.

What should I do if I think my debts are statute barred?

If you are being contacted about a debt that is a simple contract debt, and you think it is statute-barred, you can use the Time has run out to recover the debt sample letter. Write to the creditor telling them about the Limitation Act. Keep a copy of any letters you send.

If you have one of these debts, but you have not heard anything about it for some time, you could choose to ignore it.  However, debts can appear again out of the blue, so you need to accept this might happen.

If you have made payments towards a debt where the limitation period of six years has already gone by, and no court action has already been taken, the debt is probably still statute barred. Contact us for advice. 

You also need to check whether any court action has already been taken. This is because if it has, time limits may not apply and you could be at risk of enforcement action such as bailiffs. See the later section County court judgments for more information. If you are not sure whether court action has taken place, you can check one of your credit files, or the official Registry of Judgments, Orders and Fines. For more information, see our Credit reference agencies guide. The guide will also explain how long information about your debts can stay on your credit reference files.  

If you are unsure whether your debt is statute barred, call National Debtline for free advice.

Contact from creditors

If your debt is regulated by the Consumer Credit Act, you may still get letters even if the debt is statute-barred. This is because the law says that some ‘notices’ must still be sent even if the debt is over six years old.

The Financial Conduct Authority (FCA)

The Financial Conduct Authority (FCA) has published the Consumer Credit sourcebook (CONC) which looks at whether a debt is being collected fairly. Although the FCA cannot investigate individual complaints, you can still use their rules and guidance when disputing a debt on the grounds of limitation. All of the rules and guidance applies, no matter how old the debt is.

In the Consumer Credit sourcebook (CONC), the FCA includes the following rules and guidance:

• “…a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period.” 7.15.4 Rule
• “It is misleading for a firm to suggest or state that a customer may be the subject of court action for the sum of the statute barred debt when the firm knows, or reasonably ought to know, that the relevant limitation period has expired.” 7.15.7 Guidance
• “A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred.” 7.15.8 Rule

You can make a complaint to your local trading standards department, who can look into your case. You can also complain to the FCA, as they can look into companies’ behaviour, even though they cannot deal with individual complaints. See the Useful contacts at the end of this guide, or contact us for advice.

The Financial Ombudsman Service (FOS)

You may be able to complain to the Financial Ombudsman Service (FOS) about the way a company has dealt with your account. You must follow your lender’s complaints procedure first. You can only use FOS to complain about events that happened from April 2007 onwards. See the Useful contacts  at the end of this guide, or contact us for advice.

Other debt types

Council tax

If you miss payments on your council tax, the council can ask your local magistrates’ court to make a liability order against you. A liability order allows the council to take further action to collect the debt, such as deducting money from your wages or asking a bailiff (enforcement agent) to visit your home.  

A council should not go to the magistrates’ court and ask for a liability order for council tax more than six years after the council tax became due. This is under Regulation 34(3) of the Council Tax (Administration and Enforcement) Regulations 1992.

The cause of action (when the limitation period starts running) for council tax is when the council first sent a bill to you. Unreasonable delays in sending bills could be grounds for making a complaint to the council and, if unresolved, to the Local Government and Social Care Ombudsman. Contact us for advice.

For more information about dealing with council tax arrears, see our Council tax arrears guide.

Liability orders

Once the council has obtained a liability order, there is no time limit for enforcing it. There may be limits on how the council can enforce old liability orders. Contact us for advice about this.

Mortgage shortfalls

A mortgage shortfall can happen if your home is repossessed, and not enough money was raised by the sale to pay the balance owing on the mortgage and any secured loans. Your lender may then chase you for the remaining amount.

The Limitation Act says that the limitation period for mortgage shortfalls is twelve years for capital (the money you borrowed) owed, and six years for the interest (money the bank charges on top of the amount you borrowed over time) part of the shortfall. When you make mortgage repayments on a repayment mortgage, some of this goes towards the capital and some to the interest. Usually to begin with, most of each repayment goes towards interest, so you repay more interest than capital at first. If you have an interest-only mortgage, your repayments only pay off the interest.

The cause of action (when the limitation period starts running) for mortgage shortfalls, is usually when the lender is entitled to be repaid in full. Under the terms of most mortgages, this will usually be after two or three missed payments.

Mortgage shortfalls can be complicated, if you have one of these, contact us for advice.  To find out more about mortgage shortfalls, see our Mortgage shortfalls guide.

Income tax and VAT 

There is no time limit for recovery of tax, duty, or any related interest. However, National Insurance is not classed as a tax and is therefore subject to a six-year limitation period.

For more information about dealing with income tax and VAT debts, see our Business debts guide.

Can DWP debts and other benefit overpayments be statue barred?

The Limitation Act says that the limitation period for benefit overpayments and social fund loans is six years. So, DWP debts can be statute barred. However, this may be of limited use in practice because they may be able to collect the debt from you anyway without going to court.  

The cause of action (when the limitation period starts running) for benefit overpayments is when a final decision is made on the overpayment. This is most likely to be a final decision by a council, the Department for Work and Pensions (DWP) or a tribunal.

For social fund loans, the cause of action is when the loan becomes due for repayment.

If the council or DWP tries to issue a county court claim against you for an overpayment of benefit, and you think it is statute-barred, you can put in a defence. This is complicated and you should get advice from a benefits adviser or solicitor first. Contact us for advice about how to find the right legal advice for you.

But if you are getting ongoing benefits or are employed, the DWP or council may be able to take money directly from your benefit or wages to repay overpayments. The rules can be complicated so contact us for advice. To find out more about dealing with different kinds of benefit overpayments, see our guides.

• Benefit overpayments under the Universal Credit system guide
• DWP benefit overpayments guide
• Housing Benefit overpayments guide
• Tax credit overpayment guide

County Court

To recover overpaid benefits, the DWP and local authorities can use the normal county court route. There is also a fast-track process for registering the debt in the County Court, as if it were payable under a county court order. If this happens, contact us for advice.

Student loans

There are ‘old-style’ and ‘new-style’ student loans. Old-style student loans are for students who started their university course before 1 September 1998. New-style student loans apply to students starting their course from 1 September 1998 onwards.

The Limitation Act says that the limitation period for student loans is six years.

Old-style loans

Old-style loans usually become due for repayment in the April following the conclusion of your course, unless you defer. Deferment stops the loan from becoming due for payment for 12 months. You may be able to defer more than once. If you are not able to defer, you will be asked to make payments.

If you miss payments, the cause of action (when the limitation period starts running) is usually when a default notice has been sent to you and then expired. If a default notice wasn’t issued soon after you missed payments, or if there is no longer any record of whether a default notice was ever issued, contact us for advice.

You can find out more about default notices in the earlier section, Unsecured credit debts.

New-style loans

For new-style student loans, the limitation period may start running if you miss a payment after your earnings reach the set level at which deductions from your wages can begin. But because the Student Loan Company can take money directly from your wages, it might be more difficult to use the Limitation Act. If you think your loan may be statute barred, contact us for advice.

Child Support Agency (CSA) and the Child Maintenance Service (CMS)

If you owe money to the CSA or the CMS, the limitation rules can be complicated. From 12 July 2006, there is no time limit within which the CSA or the CMS must apply for a liability order. Once they have a liability order, a six-year limitation period applies for them to use certain types of enforcement, such as bailiffs. There is no time limit for them to use enforcement such as disqualification from driving or imprisonment.

There are some ways the CSA or the CMS can try to make you pay that do not require them to have a liability order at all. These include taking money from your wages, benefits or bank account. Contact us for advice.

Delays in taking action

You might be able to complain if you think there has been an unreasonable delay in action being taken. Contact us for advice.

County court judgments

Once a creditor has a county court judgment (CCJ) for a debt, the Limitation Act does not put any time limits on how long they have to enforce that judgment.

If your CCJ is more than six years old, and the creditor wants to use bailiffs (enforcement agents), they must first get permission of the court. Special rules apply if your creditor asks for a third-party debt order or if you already have a charging order against your property. Contact us for advice.

If you think the creditor has been to court and got a CCJ against you after the six-year limitation period has passed, you can ask the court to ‘set aside’ the CCJ so you can put in a Limitation Act defence. For more information, see our Setting aside a CCJ guide.

Bankruptcy

If a creditor already has a county court judgment (CCJ) against you, there is no limitation period to make you bankrupt. If there is no CCJ, there is a six-year limitation period to make you bankrupt.

Joint debts

If you have a debt that is in joint names with another person, this means your creditor can chase either or both of you for the full amount. You do not only owe 50% each.

• If you think your joint debt might be statute-barred, you need to check if the other person has made any payments. If they have made a payment within the limitation period, this means the time limit restarts again for both of you.
• If the other person has not made any payments, but has admitted in writing to the creditor that they owe the debt, the time limit will only restart for them and not for you.

If you are having problems finding out if the other person has made any payments, contact us for advice.

Useful contacts

Financial Conduct Authority (FCA) Regulator for financial services such as payday lenders, banks, credit companies, insurance companies and mortgage lenders. Phone: 0800 111 6768 or 0300 500 8082 www.fca.org.uk

Financial Ombudsman Service (FOS) For complaints about banks and other creditors. Phone: 0800 023 4567 www.financial-ombudsman.org.uk

Other guides that may help you

Benefit overpayments under the Universal Credit system guide

Business debts guide

Council tax arrears guide

Credit reference agencies guide

DWP benefit overpayments guide

Housing Benefit overpayments guide

Mortgage shortfalls guide

Setting aside a CCJ guide

Tax credit overpayment guide