Understanding Statute Barred Debts: Is It Too Late to Recover What You’re Owed?

Many businesses are unaware that pursuing debt can come with a time limit. Under English law, the Limitation Act 1980 sets out the timeframe within which a creditor must take legal action to recover a debt. If this time limit expires, the debt may become “statute barred”—meaning the creditor may no longer be able to enforce the debt through the courts.

What Is the Limitation Period for Debts?

For most simple contract debts—including unpaid invoices—the limitation period is six years from the date the “cause of action” arises. This usually means six years from the invoice due date or the date when payment was contractually required. If no payment is made and no legal action is initiated within that period, the creditor may lose the right to pursue the debt through legal proceedings, such as a County Court Claim (CCC).

So, what does this mean in practice?

Case Scenario: Is the Debt Still Recoverable?

Let’s consider this example:

ABC Limited is trying to recover a £10,000 debt from XYZ Limited. The debt arises from Invoice 123, which was issued in 2018. It is now 2025, and no payment has been made. ABC Limited wants to know if they can still legally pursue XYZ Limited for the balance.

At first glance, the situation looks bleak. More than six years have passed since the invoice was raised. ABC Limited might assume the debt is now statute barred—and therefore not enforceable through the courts.

But is that the end of the road? Not necessarily.

The Key Exception: Resetting the Limitation Period

While the six-year limitation period applies in most cases, it can be reset under certain circumstances. Specifically, under Section 29(5) of the Limitation Act 1980, the limitation clock restarts if:

1. The debtor acknowledges the debt in writing and signs it (which can include emails and digital signatures), or
2. The debtor makes a payment (even a small one) towards the debt.

In either case, the six-year limitation period starts again from the date of the acknowledgment or payment.

Applying the Rule: The Importance of Evidence

Returning to our scenario:

Let’s say that in 2022, XYZ Limited sent an email to ABC Limited stating:

“We’re aware of the outstanding balance on Invoice 123. We’re reviewing our accounts and will update you soon.”

This would count as a written acknowledgment of the debt. According to the Limitation Act, the right of action is now considered to have accrued again in 2022, effectively resetting the six-year period. As a result, ABC Limited would now have until 2028 to bring a court claim against XYZ Limited.

This highlights a crucial point:

Even if a debt is several years old, it might not be statute barred if there is evidence of recent acknowledgment or partial payment.

What Can Creditors Do If the Debt Is Potentially Statute Barred?

If you suspect a debt may be close to or beyond the limitation period:

• Review your records: Look for any communication from the debtor that could be considered an acknowledgment—emails, texts, letters, or notes of phone conversations.
• Check for payments: Any part-payment received resets the limitation clock.
• Act promptly: If the six years is close to expiring, consider taking swift legal advice to determine whether to issue a County Court Claim before it’s too late.

Importantly, even when a debt is statute barred, it is not technically written off. The debt still exists, and you are still allowed to contact the debtor to request payment—but you cannot legally compel them to pay it via county court action.

Takeaway: Keep Detailed Records and Act Early

Debt recovery can be a long process, but time matters. The difference between a recoverable claim and a statute barred one can come down to one email or a single payment.

So, for creditors:

• Maintain comprehensive communication logs.
• Document every payment, however small.
• Be aware of the dates that trigger the limitation period.
• Seek legal advice early if you’re unsure.

By staying organised and proactive, you improve your chances of recovering the money you’re owed—even years down the line.

If you need tailored advice or assistance in recovering a debt that may be close to becoming statute barred, contact our Top Tier Legal 500 Debt Recovery team who will be able to assist you. Early action is often the key to success!