If the creditors do not take action against a debt then the debt can become ‘unenforceable ‘ or in other words statue barred. What this means is the creditors cannot take any court action to recover the debt. The debt does still exist but the law (statue) can be used to stop (bar) the creditor. Depending on the debt however they still maybe able to take other action.

    The statue barred rules vary across the UK and it’s important to know which are applicable to the country you live in. It’s vital if someone believes their debt is statue barred that they seek professional debt advice and do not ignore creditors. 

    For advice on any debt problem, please contact one of these charities:

    StepChange: 0800 138 1111
    Debt Advice Foundation: 0800 043 40 50
    Citizens Advice Bureau: 0808 223 1133
    National Debtline: 0808 808 4000

    Statue Barred England, Wales & Northern Ireland

    Limitation period is the period in time which the creditors have to take court action. This does vary depending on the type of debt however for most types the period is six years.

    The exceptions are:

    • If the creditor has already started to take action then the debt cannot become statue barred.
    • Personnel injury claims only have a three-year limitation period.
    • Mortgage shortfalls have a limitation period of twelve years. Though the interest has a limitation period of six years.
    • HMRC debts do not have a limitation period on Income tax, VAT and capital gains tax.

    The limitation period will begin from when:

    • You last made a payment to the debt.
    • The last time you acknowledged the debt in writing.
    • The earliest date the creditors could have taken action.
    • If the debt is in joint names then it is the last time either party acknowledged it.
    • If you have been in a debt solution and a third party has paid on your behalf this also count.
    • Once a debt has become statue-barred the creditor will no longer be able to get a CCJ and they won’t be able to make you bankrupt.

    If the creditor is not regulated by the FCA, they can still contact you and ask for payment. Some creditors have the power to take further action without going to court. A direct earning attachment can still be applied from HMRC (tax credit overpayments, DWP or local authority over payment).

    For debts which are regulated by the FCA, once you have shown them the limitation period has passed and informed them you won’t be paying the debt then they should stop contacting you.

    Statue Barred Scotland

    In Scotland if the creditor waits too long the debt will become prescribed. By law once the debt is prescribed it no longer exists and the creditors can take no further action.

    The law in Scotland is that the debt no longer exists. If you have made a payment to a prescribed debt then you can ask for the money to be refunded.

    Though the default could remain in your credit file making it difficult to get future credit.

    In Scotland the prescription period is for five years this is for most types of debt although there are some exceptions:

    • If the creditor has already started to take action then the debt cannot become prescribed.
    • Mortgage shortfalls have a limitation period of twenty years. Though the interest has a limitation period of five years.
    • HMRC debts do not have a limitation period on Income tax, VAT and capital gains tax.

    Is My Debt Statue Barred?

    To find out if your debt qualifies it is important to find out when you last made a payment, this can be done by checking your bank statements or your credit history. If you still can’t find out call the creditors and explain that the debt is statue barred. If they believe it is not then it’s best to request evidence. If they do send proof that you have acknowledged the debt or made payment then you will need to start making payments.

    Often people believe by not contacting the creditors the debt simply go away but the opposite is usually true, creditors can start to take action if they don’t hear from you which could result in a CCJ. You may be able to avoid this by communicating and coming to an arrangement with your creditors.