Statute Barred Debt
In England and Wales, most unsecured debts (credit cards, loans, utility arrears) become "statute barred" under the Limitation Act 1980 if no payment or written acknowledgement is made for six years. Once statute-barred, creditors cannot use court action to enforce the debt. Mortgage capital shortfalls have a 12-year
Key Limitation Periods (England & Wales)
Unsecured Debts (6 years): Credit cards, personal loans, overdrafts, utility bills, and council tax.
Mortgage Shortfalls (12 years): For the capital sum, but 6 years for interest.
Tax Debts (No Limit): HMRC can pursue income tax, VAT, and capital gains tax indefinitely.
Court Judgments (CCJ): If a CCJ is obtained, the 6-year limit no longer applies. However, creditors need court permission to enforce a CCJ older than 6 years.
When the Clock Starts
The six-year period begins from the "cause of action," which is generally when the debt became payable, or the date of the last payment or written acknowledgment.
Resetting the Limitation Clock
The six-year period restarts if you:
Make a payment towards the debt.
Acknowledge the debt in writing (email, letter, etc.).
What to Do If Contacted
If a creditor contacts you about a debt over six years old, you should:
Check your records: Confirm you have not made a payment or acknowledged the debt in the last six years.
Do not admit liability: Do not make a payment or sign anything confirming you owe the money until you are certain.
Inform them it is statute barred: If it is, write to them stating the debt is unenforceable.
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