What is Statute Barred Debt?

We know that the terms and jargon you come across when you’re dealing with debt can sometimes be confusing and tricky to understand. That’s why we’ve created these frequently asked questions and answers.

Statute barred debt can be a complicated area of law.  It differs depending on the type of debt you have, your contract or credit agreement, and whereabouts you are in the UK.

What does statute barred debt mean?

The law in England, Wales, and Northern Ireland is different to that in Scotland.

In England, Wales, and Northern Ireland

If you have a debt and you have had no contact with the creditor and made no payments in the ‘limitation period’, your debt becomes ‘statute barred’, unless it’s subject to a County Court Judgment (CCJ).

That doesn't mean that the debt no longer exists. It does, and the creditor can still ask you to pay the outstanding balance. However, once a debt is statute barred, the creditor can no longer take legal action (e.g. the creditor cannot instruct solicitors to issue a claim form demanding payment of the outstanding balance).

In Scotland

In Scotland, it’s slightly different.

Instead of a debt becoming statute barred, it becomes ‘prescribed’ if your creditor doesn’t try to recover it within what’s called the ‘prescription period’. Another crucial difference is that in Scotland, once a debt becomes prescribed it no longer exists, which means the creditor cannot ask you to pay it.

What is the limitation or prescription period?

Your creditor can only take court action during the limitation/prescription period.

In England, Wales, and Northern Ireland the limitation period is six years for most types of debt.

In Scotland, the prescription period is five years for most types of debt.

When does the clock start ticking on the limitation and prescription periods?

This is where things start to get complicated.

The moment when the limitation (or prescribed) period starts counting down is known as the ‘cause of action’. And this depends on many distinct factors, including the type of debt you have and the actions that both you and your creditor have taken.

The National Debtline have a couple of comprehensive factsheets that explain the detail behind ‘cause of action’ and offers a free helpline for advice about your particular situation. There’s one factsheet for England, Wales, and Northern Ireland, and another for Scotland.

How do I know if my debt with Lowell is statute barred?

If you think that your Lowell debt has passed the limitation or prescription period, please call us on 0333 556 5552 so we can check for you.

We know that being in debt can be stressful but we’re here to help and support you. So please don’t hesitate to get in touch if you’re unsure about your situation or you're feeling worried about what to do next. We want to work with you to help you clear your debt with us.

Can creditors contact me about statute barred debt?

In England, Wales, and Northern Ireland, although the creditor can still contact you to ask for payments, they cannot take legal action (e.g. they cannot instruct solicitors to issue a claim form demanding payment of the outstanding balance).

Where an account is governed by Scottish law, instead of a debt becoming statute barred, it becomes ‘prescribed’ which means the creditor cannot recover the balance, so the account is closed, and the debt is written-off.

What happens if I ignore creditors getting in touch about statute barred debt?

At Lowell, we want to help you break free of your debt with us, in a way that works for you. So we don’t charge any interest. And we don’t add any fees. We listen to your story. We’ll help you work out what you can afford to pay.

If you have any questions about how you can work with Lowell, check out our other helpful guides in our Debt Guidance hub, and if you need anything else, you can always get in touch with our team.

First Published: 4th July, 2023

Last Updated: 30th July, 2024