This is the first question in every debt matter and the one most often answered by assumption. It also has a feature that surprises almost everybody: the clock can be restarted, by an email a debtor sent two years ago or by a small payment they made to keep a creditor quiet.
Six Years, Twelve Years — and Where the Clock Starts
Under the Statute of Limitations 1957, a simple contract debt generally carries a six-year period running from the date the cause of action accrued. Where the obligation is contained in a deed or instrument under seal, the period is generally twelve years — which is why the form of the underlying document is worth checking rather than assumed, particularly with guarantees and security documents. “Simple contract” covers the overwhelming majority of commercial debts: invoices, supply accounts, service fees, ordinary loans. The harder question is when the clock started, and it is frequently not the invoice date. Where terms of trade allow thirty days, the cause of action generally accrues when that period expires. Where a debt is payable on demand, the position can differ with the nature of the obligation. Where there is a running account, or payments have been made and allocated across several invoices, the analysis becomes genuinely technical. A few weeks can be the difference between a claim and a barred debt, so this is a fact to establish precisely rather than approximately — and it is the single most common thing this firm is asked to check.
What Restarts It — and What Being Barred Actually Means
Two things can cause the period to run afresh: a written acknowledgment of the debt by the debtor, signed by them, and a part payment on account of the debt. The requirements are technical — particularly as to the form of an acknowledgment and by whom it must be made — so neither should be assumed to have worked, or to have failed, without advice. The consequences cut both ways, which is why this page matters to creditors and debtors equally. A creditor sitting on an old ledger may have an email in which the debtor accepted the balance, and may therefore have far more time than they believed. A debtor who made a modest payment on an old account, or wrote to acknowledge it, may have revived a liability that had effectively expired. As to what “statute-barred” means: generally the remedy is barred rather than the debt extinguished, and limitation is a defence that must be pleaded. A court does not apply it automatically — so a debtor who ignores proceedings on a barred debt may have judgment entered against them on a claim they could have defeated. That is one of several reasons never to ignore proceedings. Finally, the trap that catches careful creditors: only issuing proceedings stops time running. Not a demand, not instructing a solicitor, not negotiating in good faith for eight months. If a deadline is close, issue to protect the position and keep negotiating afterwards.
Not Sure Whether It Is Still in Time?
The accrual date is fact-sensitive and the acknowledgment rules are technical. Send when the debt fell due, the terms of trade, and any correspondence or payment since - it is usually answerable quickly.
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