Can a Statute Barred Debt be ‘Unbarred’? 2022
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Can a statute barred debt be unbarred? You might be worried about your statute barred debt being reversed and you suddenly being made to pay it. But are these concerns legitimate? Put your mind at ease with this quick guide discussing statute barred debts.
What is a statute barred debt?
A statute barred debt is a debt that cannot be enforced through court action due to its age. The legal system has prevented creditors from taking people to court over old debts to prevent court resources from becoming stretched.
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Can a statute barred debt be enforced?
A statute barred debt can never be enforced using bailiffs or other types of enforcement action. This is because a creditor must have won a CCJ against you before asking the courts to use bailiffs. If they cannot take you to court, they cannot get a CCJ and they can therefore never enforce the debt with bailiffs.
When does a debt become statute barred?
Many debts become statute barred after six years or after five years in Scotland, as per The Limitations Act. Not all debts become statute barred and some may have different time periods before becoming statute barred. The debt will only qualify as statute barred if during this time you have not made a repayment towards the debt and you have not acknowledged owing the money.
If you make a payment towards the debt or acknowledge owing the debt, the countdown for the debt to become statute barred restarts.
When a debt cannot be statute barred
A debt can never become statute barred when you have already been issued with a County Court Judgment (CCJ) requesting you to pay. Once you receive a CCJ, the creditor has unlimited time to recover the money.
Some debts have a longer limitations period before becoming statute barred, such as mortgage arrears or council tax debts in Scotland. And some debts can never become statute barred, such as tax debts to HM Revenue and Customs.
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Do I have to pay a statute barred debt?
You do not need to pay a statute barred debt. Once the debt becomes statute barred, the creditor cannot take any legal action against you that would force you to pay. This does not mean the debt is written off because it still exists; it’s just legally unenforceable. When a debt becomes statute barred, you may want to ask your creditor to write off the debt.
You might still choose to pay off a statute barred debt to protect your credit score.
Can a statute barred debt be ‘unbarred’?
A statute barred debt can never be reversed and legally enforceable again. This is the case even if you make a payment towards the debt or admit that you owed the debt after it becomes statute barred.
How do you revive a time-barred debt?
It is simply impossible for a creditor or company to restart a debt that has become barred, also known as statute barred.
Can I be chased for a statute barred debt?
A lender might still chase you for a statute barred debt, but that doesn’t mean you have to pay. Once a debt becomes statute barred a lender might still contact you asking you to repay the debt. If this happens, you should inform them that the debt has become statute barred and they should never ask you for any more repayments.
If they continue to ask for payments, you can report the creditor to the Financial Ombudsman. This is because the Financial Conduct Authority states it is not fair for a lender to request payments on a statute barred debt.
How to inform a creditor your debt is statute barred
You might want to tell your creditor that the debt is statute barred and ask them never to contact you again. You should do this by sending them a letter and keeping a copy of the letter in case you do need to make a complaint to the Ombudsman.
We’ve made this a lot easier by providing our own statute barred letter you can download for free.
Double-check your debt is statute barred first!
Always double or triple check if you suspect your debt has become statute barred. You can do this by speaking with a free debt advice charity or by getting commercial financial advice.
You should avoid telling your creditor that the debt is statute barred if it hasn’t yet become statute barred because the creditor could be alerted to the debt. Or they might even have a case to use your communication as a way to restart the time period.
Can a statute barred debt be reinforced? (Quick recap)
A statute barred debt can never be reinforced, even if you made a payment towards the debt after it became statute barred.
Read more about statute barred debts now
We have more detailed information on statute barred debts on MoneyNerd. Learn more details and get answers to the other FAQs surrounding legally unenforceable debts with us.