Statute-Barred Debt

A statute-barred debt is not extinguished — you still morally owe it — but the creditor cannot use the courts to enforce. The 6-year (or 12-year for mortgage principal) clock restarts on any payment OR any written acknowledgement. A token £1 payment or an email admitting the debt resets the clock. Some debts have different rules — council tax is 6 years before Liability Order but indefinite afterwards; magistrates' court fines have no limitation. Once statute-barred, the creditor should cease collection activity; continuing aggressive demands may breach FCA CONC 7 rules on fair conduct.

In practice, old debts resurface because portfolios are sold on cheaply and the buyer writes to everyone on the list. The letter often looks alarming and may include a settlement offer designed to prompt a small payment. That is the trap: a single pound paid, or a written admission that the debt is yours, restarts the whole limitation period and hands the creditor another six years in which to sue.

Worked example: Priya receives a letter about a catalogue account she last paid in 2019. She does not phone, because a recorded call in which she says the account sounds familiar and offers £5 a month would be both an acknowledgement and a part payment. Instead she writes: she asks for a copy of the credit agreement and a full statement of account, notes that she believes the debt to be statute-barred, and says she is not admitting the debt. If a claim form arrives anyway, she files a defence within the deadline expressly pleading limitation, since a court will enter judgment against her by default if she ignores it — and a judgment obtained on a statute-barred debt is still enforceable unless it is set aside.

The misconceptions matter. Statute-barred does not mean the debt no longer exists, that it must be removed from your credit file (that is a separate six-year rule from default), or that the creditor commits an offence by asking you to pay. What the FCA rules do prohibit is misleading you about enforceability or pressing on when you have said the debt is statute-barred and disputed. Note also that the clock is about your payments and admissions, not about the creditor chasing you: letters, phone calls and default notices do not restart it. And some debts follow different rules entirely — council tax after a liability order, magistrates' court fines, and mortgage shortfalls among them.

Statute-barred status comes from the Limitation Act 1980, and matters most when a creditor threatens a county court judgment or instructs an enforcement agent. Read our guides to statute-barred debts and debt collection harassment, and get free advice before you respond in writing.