Statute-Barred Debt

Statute-barred debt is consumer debt on which the creditor has lost the right to obtain a court judgment because the relevant limitation period has expired without court action being commenced. In England and Wales, most unsecured consumer debts become statute-barred six years after the cause of action arose — generally the date of the last payment or acknowledgment of the debt. The period is five years in Scotland; different rules apply in other jurisdictions.

A statute-barred debt is not legally erased — it still exists, and the creditor or a debt purchaser may still ask for payment. However, they cannot threaten court proceedings or obtain a county court judgment to enforce collection. Importantly, any formal acknowledgment of the debt in writing, or any payment, may reset the limitation period in some jurisdictions, potentially making the debt enforceable again for a new six-year period.

Consumers must know their rights: if a creditor issues county court proceedings on a statute-barred debt, the limitation defence can be raised. Free debt advice services (Citizens Advice, StepChange in the UK) can help consumers identify whether a debt is statute-barred and draft appropriate responses to collectors.