Statute-barred debt in Scotland

In Scotland, most debts that come from a contract, such as credit cards, loans and overdrafts, are extinguished if five years pass without a payment, a written admission from you, or a relevant claim by the creditor such as court action. This is called prescription (often described as a debt being ‘statute barred’). Once a debt has prescribed, it no longer exists. Court decrees, council tax and some other debts have a 20-year period instead.

What is prescription?

Scots law says that if a debt covered by the five-year rule has existed for a continuous period of five years after it became enforceable:

• without any relevant claim being made by the creditor, and
• without the debt being relevantly acknowledged by you,

then at the end of that period the debt is extinguished. This is the ‘short negative prescription’ in section 6 of the Prescription and Limitation (Scotland) Act 1973.

The five-year rule covers most obligations arising from a contract, which includes most consumer credit debts. The FCA’s rules for lenders and debt collectors describe it the same way: in Scotland, a statute-barred debt ceases to exist and is no longer recoverable.

When do the five years start?

The five years run from the date the debt became enforceable. For some debts the law sets the start date more precisely. For example:

• Loans: the date the contract says repayment is due, or, if the contract does not say, the date the creditor first demands repayment in writing.
• Running accounts for goods or services (other than banking): the date payment for the last goods or services became due.
• Debts payable by instalments: the date the last instalment was due.

Citizens Advice Scotland says that for some debts the time may run from when you received a termination notice. Periods when the creditor could not claim because of fraud by you, or an error you caused, do not count. Working out the start date can be technical, so get advice before relying on it.

What restarts the five years?

Things you do (a relevant acknowledgement)

Only two things count:

• A payment, or anything else done towards the debt that clearly shows it still exists. Citizens Advice Scotland says a payment always resets the time limit if it has not already run out, even a small one, or one made by someone else for you.
• An unequivocal written admission, made by you or for you to the creditor or their agent, clearly acknowledging that the debt still exists.

Joint debts: if one of you makes a payment, the clock restarts for both of you. If one of you admits the debt in writing, it restarts only for the person who wrote.

Things the creditor does (a relevant claim)

• starting court proceedings for the debt
• presenting or joining a petition for your sequestration (bankruptcy), or claiming in it
• making a claim to the trustee of a trust deed you have granted
• carrying out diligence (legal enforcement) to recover the debt

A letter or phone call demanding payment is not on this list. If a relevant claim or acknowledgement happens, a fresh five-year period begins.

Which debts last longer than five years?

The five-year rule does not apply to some debts. They fall under the 20-year long negative prescription instead. They include:

• Court decrees. Once a creditor has a decree (court order) against you, Citizens Advice Scotland says they have 20 years to enforce it.
• Council tax, and any surcharge, fees or costs of enforcing it. See council tax arrears.
• Taxes and duties owed to the Crown.
• Some benefit and tax credit overpayments.
• Child support maintenance.

Citizens Advice Scotland also says that after a repossession, a mortgage shortfall has a 5-year limit for the interest but 20 years for the main amount.

Several of these were added to the list of exceptions on 28 February 2025. If you have a very old debt of one of these types, ask an adviser which rules apply to it.

How is Scotland different from England?

Creditors and collectors based in England must take account of Scottish law when dealing with someone who lives in Scotland. If you have moved between the two countries, which rules apply can be complicated, so get advice.

What if a creditor is still chasing a prescribed debt?

FCA rules say a lender or debt collector:

• must not mislead you about your rights and obligations
• must not suggest you could face court action for the debt when it knows, or should know, the time limit has passed
• must not keep demanding payment after you have told it you will not pay because the debt is statute barred

Citizens Advice Scotland suggests these steps:

1. Write only once you are sure the debt has prescribed, stating ‘I don’t admit any liability for your claim’. Do not say you are unsure what you owe or that the amount is wrong. National Debtline has a sample letter.
2. Get free proof of postage from the Post Office.
3. If they keep contacting you, complain to the firm, then to the Financial Ombudsman Service. See debt collectors in Scotland.
4. If you get court papers, respond by the deadline and explain that the debt has been extinguished. Get help from an adviser.

If you are thinking about a formal debt solution, tell the adviser about any debt you think may have prescribed, so it is looked at before anything is signed.

Official sources

• Prescription and Limitation (Scotland) Act 1973, section 6 (five-year prescription)
• Prescription and Limitation (Scotland) Act 1973, including sections 7, 9 and 10 and Schedules 1 and 2
• Citizens Advice Scotland: check if you have to pay a debt
• FCA Handbook, CONC 7, including 7.8 (jurisdiction) and 7.15 (statute barred debts)
• Limitation Act 1980, section 5 (England and Wales)