A debt is considered Statute Barred if a creditor has not contacted a debtor for a period of 6 years and no action has been taken on the account.

Although the debt is still legally acknowledged as being owed, the creditor is not able to take any legal action against the debtor in order to recover the debt. It is considered unfair if a creditor or Debt Collection Agency (DCA) misleads the debtor into believing the debt is still legally recoverable. It is also considered an unfair practice if the creditor or DCA press for payment after the debtor has stated they will not be paying the money owed. This could amount to harassment contrary to s.40(1) of the Administration of Justice Act 1970.

Some lenders and many DCA's will continue to request money for debts that have lapsed beyond six years. If you find that you are being pursued for a debt that you believe is statute barred, then use this letter.

Dear Sir/Madam

Re: Account No/Your Ref:

No debt is acknowledged to your company yet you have contacted me regarding the above account.

As I am sure you are aware, under the Limitation Act 1980, s.5 “an action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

No correspondence/payment/acknowledgement of this debt has been made within the last six years and accordingly unless you can provide evidence of payment or written contact from me in the relevant period under s.5 of the Limitation Act 1980, I suggest that you are no longer able to take any court action against me to recover any alleged amount claimed.

Furthermore, the FCA Consumer Credit Sourcebook (section 7.15) states that "Notwithstanding that a debt may be recoverable, a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period." and that ''A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred.''

I await your written confirmation that no further contact will be made concerning the above account and confirmation that this matter is now closed.

I look forward to your early reply.

Yours faithfully

(Your signature)
(Your Name)

Under the Limitations Act 1980 a creditor has six years to chase most unpaid debts, or twelve years for some mortgage shortfalls. This ‘limitation period’ starts from the time of your last payment, not the total length of time you’ve been making payments. If a court judgment (CCJ) has been registered against you before the limitation period has passed it can be enforced at any point. There is no limitations period for a CCJ. There’s also no limitation period for debts owed to the Crown such as income tax.

If a debt is statute barred it isn’t ‘written off’ and it doesn’t disappear. If a debt is not enforceable it means that if a creditor tries to take you to court, you’ll be able to defend the case and you won’t get a CCJ. It’s also considered to be unfair practice to keep chasing a debt which is statute barred, so you could make a complaint if a creditor keeps pressuring you for payment.

Some creditors such as the DWP have legal powers which allow them to take money from wages or benefits without going to court. They can still do this even if the limitation period has passed.