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How Long Can Energy Companies Chase You for Debt? 2022

HomeDebt InfoEnergy DebtHow Long Can Energy Companies Chase You for Debt? 2022
how long energy companies chase debt

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

How far back can an energy company charge you?

Depending on the circumstances, an energy company can go back either 12 months or 6 years to charge you for any unpaid energy bills. 

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Bills which are more than 12 months old 

Under Ofgem ‘back billing rules’, an energy supplier can’t chase debts which are more than 12 months old if the reason that they are chasing the debt is down to their own mistake or omission. 

A mistake could be that the bill was based on an inaccurate reading and therefore the amount is in question. An omission could be that they didn’t send you a bill at the time. 

In order to have debts over 12 months old written off, you must be able to show that the supplier failed to calculate the bill correctly or did not serve the bill in time. 

You are obliged to pay any old or outstanding bills which do not fall under the above categories. 

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Bills which are more than 6 years old 

If you have been served an accurate gas or electricity bill, an energy company can charge you as far back as 6 years. 

Is an energy debt written off after 6 years?

If you do not pay the debt at all, the law sets a limit on how long a debt collector can chase you. 

Debt is written off after 6 years where you do not make any payment to your energy supplier during that time, or acknowledge the debt in writing. 

Under these circumstances, the debt then becomes what is known as ‘statute barred’. 

This means that your energy company cannot legally pursue the debt through the courts.

For more information, read our article explaining how debt write off works here

How long can water companies backdate bills?

For individual and household consumers 

A water company can backdate bills for up to 6 years under the Limitation Act 1980. 

If you have fallen into arrears with your water bills, you should ask your provider to send you their code of practice for dealing with customers who have failed to make their payments. 

It can be very helpful to have a copy of this code of practice to help you to negotiate with the water company. 

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Where bills are causing you distress 

You can see the government guidelines for water companies whose customers have fallen behind with payments here. You can refer your water company to this guide if their approach is causing you distress. 

An example of a practice which causes distress, and is recognised by the government as being unacceptable, is where there is too high a frequency of letters (or other communications) asking you to pay, or reminding you to pay. 

Legally there is a fine line between reasonable requests by energy and/or water companies for you to pay bills, and harassment. 

For eligible businesses including charities and public sector customers 

The regulator Ofwat, has taken steps to protect business customers from being chased by a water company for more than 16 months. This applies in cases where the water company had originally under-charged. 

This means that for some business customers, water companies can backdate bills up to a maximum of 16 months instead of the 6 years as given by the Limitation Act 1980. 

Can I get my energy debt written off?

Yes, you can get your energy debt written off if your bill is more than 12 months old and the bill is in error. 

Where the bill is accurate and you are struggling to pay your energy bill, there is still a small outside chance that you could get your debt written off, or at least part of it. 

If your income and outgoings mean that there is no money left over to pay the debt, you can write to your energy company explaining the situation and ask them to help. 

We have created this free template letter which you can send to your energy company in order to ask them to help in this way. 

Your energy company may ask you to fill in a form which asks you to confirm your income and outgoings. They may also ask for proof of your financial position. If you can prove that you are simply unable to pay, the energy company is obliged to recognise this, and not make attempts to extract money that you don’t have. 

Even if they don’t completely write off your debt, they may still waive late payment fees or charges, or they may be able to offer you a payment plan which you can afford within your means. 

Can an energy supplier take me to court?

An energy supplier can take you to court but only in extreme cases. 

If you have been unable to pay your energy bills and have built up debt with an energy supplier, in extreme cases an energy supplier may take you to court. 

It is important not to worry too much about this though, as there is a long process before it gets to that stage. 

If you can’t pay

If you are in a position where you simply are unable to pay, as long as you communicate this to your energy company promptly and openly, and are willing to provide evidence to back up your claim (that you cannot pay), it would never be in anyone’s best interest (including the interests of the supplier) to take you to court. 

The first thing to do if you cannot pay is to contact your energy company directly and inform them that you are unable to pay your energy bill either in full or in part. 

Your energy company may ask you to provide evidence of your income and outgoings and if it is obvious you cannot pay, they should offer you a payment plan which is within your means. 

Having your bill passed to a debt collector 

If you don’t let your energy company know that you are struggling and instead simply let the bills lapse, then the energy company may pass the debt onto a debt collector. 

A debt collector is just a specialist company focused on debt collection, they have no special powers, they are just specialists at dealing with debt, so there is still no need for alarm if this happens. 

The best thing to do is to keep communication with the debt collectors prompt and transparent. If you are open and honest with them, the debt collectors should assist you in finding a way to pay back the debt in a way that you can manage. 

Court action 

If your energy bill has been passed to a debt collector and you have not communicated with them about paying, the debt collector can apply to the court for a county court judgment (CCJ) which orders you to pay the amount outstanding. 

If you are struggling and need more advice, you can contact the charity Step Change for further advice and help. 

Don’t worry, here’s what to do!

There are several debt solutions in the UK that can be used to improve your finances. Choosing the right way to tackle your debt could save you time and money, but the wrong one could cause even more harm

It’s always best to find out about all your options from a professional before you take action.

Fill out the 5 step form to get started. 

What happens if you don’t pay your energy bill?

If you don’t pay your energy bill and you don’t have a prepayment meter installed, it is often difficult and in many cases impossible for an energy company to cut off your electricity or gas supply, even if they wanted to. 

Prepayment or Smart meters 

Where energy debts have built up and the energy company has not been able to sort the issue out with you, the energy company can install a prepayment meter. 

The energy company will do this in order to put a limit on the debt you are building up with them over time. 

Having a prepayment meter installed means that you can pay back any money owed and also pay for your ongoing energy consumption via the meter. If you don’t pay the meter can cut off your supply. 

The energy company will have to arrange with you to enter your home to have the meter installed and if you don’t allow entry, in very extreme cases, the energy company may apply for a court warrant to allow entry into your home to do this. 

Vulnerable people 

If you are suffering from depression or anxiety and would find such entry into your home ‘severely traumatic’, you must let the energy company and/or the court know this, and the energy company may be prohibited from entry. 

If you are experiencing severe financial hardship, you must let your energy company know and in some cases, you will not have to pay anything at all, even with a prepayment meter installed. 

Bear in mind that the energy company will always try and find ways to make you pay because it is their job to collect money for their service. It is up to you to stand your ground if you are unable to pay and be persistent in repeating this fact to them, even if they are suggesting you pay what you cannot afford. 

For more information please read our article Prepayment meter debt 2022

You can also read about your rights with regards to prepayment meters on the Ofgem site here

Ofgem is the national independent energy regulator, in place to protect consumers, especially vulnerable people. 

Can electricity be cut off without warning? 

Your electricity cannot be cut off without warning. In most cases, if you don’t have a prepayment meter installed, it is actually physically impossible for your energy company to cut off your electricity supply. 

Before being cut off, you would need to have a prepayment meter installed and the energy company would need to be sure that you are able to pay, but are just choosing not to. 

For this reason, it is important to communicate with your energy company as early as possible if you are having trouble paying your energy bill. 

Last resort

Your energy company cannot cut off your supply unless they have first offered you a range of payment methods to help you pay. 

Disconnecting your supply should only ever be a last resort and energy companies must leave at least 28 days from a missed payment, before they can even begin to start proceedings which could result in your supply being cut off. 

Electricity and gas suppliers must give you  7 working days’ notice  if they are going to cut your supply and that notice must be in writing. 

If you need more help you can apply to your local council which can help you via schemes such as the local welfare assistance scheme. 

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  • Stop interest and charges from soaring
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