How Long Can a Debt Be Chased? Time Limits for Business Creditors in the UK

How long can a debt be chased? In England and Wales, most business debts can only be pursued in court for six years. After that, the debt still exists, but the creditor can no longer use a court claim to recover it, and a debtor who raises the point will usually win. The detail matters, because the clock can be restarted, a judgment has its own limit, and some debts run for longer.

This guide explains how long a debt can be chased, when the six years start, what restarts them, which debts are different and what a business creditor should do before time runs out. It is written for business owners in Manchester and across the UK, and it covers England and Wales.

How Long Can a Debt Be Chased in England and Wales?

Under section 5 of the Limitation Act 1980, an action on a simple contract must be brought within six years. That covers most unpaid invoices and other ordinary business debts. Once the six years have passed without a claim being issued, the debt is statute barred.

Statute barred does not mean the debt is written off. In England and Wales, the debt still exists. What the creditor loses is the ability to enforce it through the courts if the debtor raises the time limit as a defence. Scotland works differently, where a debt can be extinguished after five years.

The time limit controls court claims, not every kind of contact. A creditor can still write or phone, but regulated lenders face rules on this. The FCA’s consumer credit rules say a firm must not attempt to recover a statute barred debt if the lender has not been in contact with the customer during the limitation period, and it is misleading to suggest court action when the period has expired. Any business should treat a threat of court action on a time-barred debt as a risk.

When Do the Six Years Start?

Time starts to run when the right to sue arises. For an unpaid invoice, that is normally the date payment fell due. Take an invoice due on 1 March 2021. A claim must be issued by 1 March 2027. What counts is the date the claim is issued at court, not the date it is served.

What Restarts the Clock?

Section 29 of the Limitation Act 1980 says that if the person liable acknowledges the claim or makes any payment in respect of it, the right is treated as arising on the date of the acknowledgement or payment. The six years then run again from that date.

An acknowledgement must meet section 30. It must be in writing and signed by the person making it, and it can be made by their agent. It must be made to the person whose claim is being acknowledged. A phone call is not enough, and an unsigned message may not be either. Take advice on whether a particular email or letter qualifies.

A part payment also restarts the period, and a payment of interest counts as a payment on the principal debt. The period can be extended again and again while it is still running.

The point many guides get wrong

Section 29(7) says a right of action that is already barred is not revived by a later acknowledgement or payment. So, the clock can be restarted only while time is still running. Some guides say a small payment on an old debt makes it enforceable again. For a debt that is already barred, the Act says it does not.

Issuing a Claim Stops the Clock

A letter before action does not stop limitation. A court claim issued within the six years does. If a debt is approaching its deadline and the debtor has not paid or acknowledged it, the claim needs to be issued before the date. Issuing and running a claim is work for appropriately regulated litigation professionals, not for MAR Legal, so build in enough time to instruct them.

Judgments Have Their Own Time Limit

A court judgment does not last for ever. Under section 24, an action on a judgment must be brought within six years of the date it became enforceable, and arrears of interest on a judgment debt cannot be recovered after six years from the date the interest became due. Enforcing an older judgment can also need the court’s permission. Do not leave a judgment to age.

Debts With Different Time Limits

• Debts under a deed: 12 years rather than six. Check the document, because the form of execution decides which period applies.

• Late payment interest: a claim for statutory interest is limited to six years from the date payment became late.

• Statutory demands: GOV.UK says that if a debt is over six years old, you cannot usually make a statutory demand.

• Mortgage shortfalls: 12 years for the capital and six years for the interest, according to debt advice charities.

• Tax and some public debts: special rules apply, and published guides disagree on the detail, so check the position for each type.

What a Business Creditor Should Do Before Time Runs Out

• Record a limitation date for each invoice: the due date plus six years. Diarise a review at the four-year point.

• Chase early. Most debts are easier to recover in the first few months than in year five.

• Where a debtor proposes a payment plan, put it in a signed written agreement that acknowledges the debt.

• Do not rely on letters. Only an issued claim stops the clock.

• Keep the contract, invoices, delivery records and every message about payment, because you will need them to prove the date.

• Include a late payment clause that preserves your statutory right to interest and claim it.

If You Are the One Being Chased

If you receive a demand for an old debt, check the dates before you pay or write anything. Do not ignore court papers, even if you think the debt is barred. The time limit is a defence you need to raise. Free debt advice is available from charities such as National Debt line and Step Change.

Final Thought

Six years sounds like a long time, until an invoice has been ignored for five of them. Record the dates, chase early and get a signed acknowledgement or issue a claim before the deadline.