Statute-Barred Debt

The six-year rule

Section 5 of the Limitation Act 1980 says that an action founded on simple contract — which covers most consumer credit — cannot be brought after the expiration of six years from the date the cause of action accrued. For most credit cards, store cards, catalogues and personal loans, the cause of action accrues on the date of default.

In plain English: if the creditor has not started court proceedings within six years of the default, they cannot enforce the debt through the courts.

This six-year period applies in England & Wales. In Scotland the period is usually 5 years (and different rules apply in Northern Ireland).

What restarts the clock — s.29(5)

Section 29(5) of the same Act creates one big exception: if you make a payment OR if you acknowledge the debt in writing within the six-year period, the clock restarts on the date of that payment or acknowledgement.

This is why debt collection agencies — especially debt buyers chasing very old debts — try so hard to get you to engage. Even partial payment, even a written response that admits the debt, can wipe out a statute-barred defence and reset the entire six years.

Important: a Pre-Action Protocol Reply Form has fields for a payment proposal and a Financial Statement (Annex 3). Filling these in — even with low numbers — has been held by courts to amount to acknowledgement under s.29(5). If you suspect your debt may be statute-barred, do not fill in either.

How to use the defence

If the alleged debt was defaulted more than six years ago and you have not made any acknowledgement or payment in the intervening period, you can:

• Send a Statute-Barred Notice formally asserting the limitation defence and putting the creditor on notice.
• If the creditor sues anyway, plead s.5 Limitation Act 1980 as a complete defence to the claim.
• Where adverse data continues to appear on your credit file for a statute-barred debt, dispute it under UK GDPR Article 16 (rectification) and section 159 CCA 1974.

CONC 7.15 — the regulator's view

The Financial Conduct Authority's CONC 7.15 rules require firms not to mislead consumers about the enforceability of statute-barred debts. A firm that continues to demand payment of a statute-barred debt without acknowledging that it is no longer legally enforceable is in breach of CONC 7.15 — and that is something you can complain to the FCA / Financial Ombudsman about.

Common mistakes to avoid

• Don't make any payment — even a token £1 — to a debt you believe is statute-barred.
• Don't fill in a Financial Statement or payment proposal on a Pre-Action Reply Form for a debt you believe is statute-barred.
• Don't use loose phrasing like "my debt" or "the debt I owe" in correspondence — use "the alleged debt".
• Don't assume an old default automatically means statute-barred — check whether you made any payment within the last six years.

Read the law

The Limitation Act 1980 is on legislation.gov.uk: s.5 — six-year limitation , s.29(5) — acknowledgement