How long do you have to chase an unpaid debt?

Debts do not last forever. After a certain period a debtor can defend a claim on the basis that it was brought too late, and the debt becomes what is often called statute barred. In England and Wales the debt still exists, but it can no longer be enforced through the courts. In Scotland the rule goes further and the debt is extinguished altogether.

The basic position

In England and Wales, the Limitation Act 1980 gives you six years for a simple contract debt, which covers most unpaid invoices. In Scotland the equivalent period under the Prescription and Limitation (Scotland) Act 1973 is five years.

The clock generally starts from the date the cause of action arose, which for an invoice is usually the date payment fell due rather than the date you raised it.

What can restart the clock

This is the part most businesses do not realise, and it frequently works in the creditor's favour. Under the Limitation Act, the period can begin again if the debtor either:

• Acknowledges the debt in writing, signed by them. An email accepting that the money is owed can be enough.
• Makes a part payment towards it. Even a small payment can reset the full period.

So a debt you assumed was long gone may still be live, if somewhere in the correspondence the debtor admitted owing it or paid something towards it while the six years were still running. It is worth going back through the file before writing anything off, and if the debtor has since moved, tracing can help locate them.

The timing matters. Once a debt is statute barred, a later acknowledgment or payment does not revive the right to sue (section 29 of the Limitation Act 1980).

Different debts, different periods

Not everything is six years. Debts secured by a deed, such as certain mortgage shortfalls, can carry a twelve year period. Some statutory debts have their own rules. If there is any doubt about which applies, it is worth taking advice rather than assuming.

If a debt is already statute barred

You can still ask for payment, and some debtors do pay. What you cannot do is issue proceedings and expect them to succeed if the debtor raises limitation as a defence. Threatening court action over a debt you know to be statute barred is not a position any reputable firm should take.

Related reading

• What to do when a customer will not pay your invoice
• Letter before action: what it is and what to put in one
• Tracing a debtor who has moved

Common questions

How long can a debt be chased in the UK?

In England and Wales, six years for most unpaid invoices and other simple contract debts, under the Limitation Act 1980. In Scotland the period is five years. Some debts, such as those secured by a deed, carry a longer period.

When does the six year limit start?

Usually from the date payment fell due, not the date the invoice was raised. If the debtor acknowledges the debt in writing and signs it, or makes a part payment, before the period runs out, the clock starts again.

Can you still ask for payment of a statute barred debt?

You can ask, and some debtors do pay. But if the debtor raises limitation as a defence, a court claim will fail, and an acknowledgment or payment made after the period has expired does not revive the right to sue.