Statute Barred: How Long Can A Debt Be Chased In The UK?
Being in debt isn’t just a financial drain. It can cause personal and emotional stress too.
As qualified Insolvency Practitioners, we’re highly experienced in navigating individuals and companies through financial difficulties.
Unsurprisingly, our team is often asked “how long can a debt be chased in the UK?”
This is a key question and there are various nuances to be aware of, such as the type of debt and whether you are solely liable.
In this blog, we will discuss how long a debt can be chased in the UK – and define the key term ‘statute barred’.
How long can a debt be chased in the UK?
The details on this can be found in the Limitation Act 1980. However, the answer to how long a debt can be chased in the UK isn’t quite so simple.
The Limitation Act 1980 stipulates the manner in which a creditor can recover a debt. But when it comes to the timeframe within which a debt can be reclaimed, there is variation according to the method of debt recovery and the type of debt.
For the purposes of this article, we will focus on the time limit after which a creditor can no longer pursue a debt via the courts (defined as statute barred – more on this below).
In England, Wales and Northern Ireland, a creditor cannot take court action after a period of six years. In Scotland, the period is five.
What does ‘statute barred’ mean?
A debt can become statute barred if the creditor and debtor do not communicate for a period of six years (or five, in Scotland).
Once statute barred, it cannot be enforced via court action.
Statute barred status is applicable to certain types of debt, such as credit cards, bank loans and store cards (often referred to as simple contract debts) providing:
- No communication between debtor and creditor, or payment towards the debt, has taken place in the past six years
- No court action has been taken by the creditor in order to recover the debt over the six-year period
Crucially, if either of the above stipulations are broken, the six-year limitation period restarts.
It’s worth being aware that not only is the length of the limitation period different in Scotland, but a statute barred debt is referred to as a ‘prescribed’ debt.
Note, a jointly-held debt can be statute barred, but any of those persons liable may restart the limitation period – affecting all those liable.
Debt types unaffected by statute barred status
There are certain types of debts that cannot become statute barred – however much time passes. Others are subject to different lengths of limitation.
There is no time limit when it comes to chasing income tax and VAT debt. HMRC can pursue such debts indefinitely.
Mortgage shortfalls only can become statute barred after 12 years for capital owed, and six years for the payable interest.
Also be aware that:
- A personal injury claim has a limitation period of three years
- Individuals who have been overpaid benefits can be chased by the Department of Work and Pensions (DWP) without court action. However, benefit overpayments are subject to a six-year limitation period, which commences on a decision being made by the DWP, Council or a Tribunal
- If a debtor has been taken to court and is in receipt of a County Court Judgement, they will be unable to make use of the Limitations Act 1980.
To the unqualified, it might not necessarily be clear whether a debt is, or could be, statute barred. There are often nuances and differing precedents to be aware of.
For example, student loans changed in format in 1998, and the fact payment can be deducted from wages can make it harder to make a case for it being statute barred.
As always, we strongly advise taking expert debt advice when it comes to debt management.
How to find out if a debt is statute barred
We have highlighted the fact different regulations apply to different types of debt.
Your first port-of-call is to identify the type of debt and whether a limitation period could apply.
If you’re clear that the debt could be defined as statute barred, you’ll need to identify the start date of the limitation period.
This date will be whichever is the soonest out of the following:
- The most recent communication between yourself and the creditor in which you acknowledge the debt
- The most recent previous payment towards the debt
- The earliest date at which the creditor could have commenced court proceedings
Solutions if chased for a statute barred debt
Because a debt is statute barred doesn’t mean it cannot be pursued – simply, the avenue of court enforcement is closed.
There are solutions available to those struggling with debt.
At Hudson Weir, we have vast experience in assisting individuals faced with personal debt.
Options such as debt management plans, individual voluntary arrangements and declaring insolvency or bankruptcy are potential routes.
For more information, take a look at our guide to personal insolvency.
How long can a debt be chased in the UK – final thoughts
The rules surrounding debt recovery can be complex and may need to be looked at on a case-by-case basis – and if you’re concerned about your personal debt situation, do get in touch with us.
Furthermore, there are a number of debt support services and charities that can be accessed, as well as the Financial Conduct Authority and the Financial Ombudsman Service.
Don’t hesitate to reach out for advice and support if required.
