Statute-barred debts in Australia: limitation periods by state and how to check an old debt

In Australia, a creditor generally has 6 years to start court action to recover an ordinary contract debt such as a credit card, personal loan or phone bill — in New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania and the ACT — and 3 years in the Northern Territory. The period usually runs from the date the debt became due or the last payment or written acknowledgement. Once it has expired without a court judgment, the debt is statute-barred: a collector can still ask you to pay, but cannot lawfully threaten or begin court action as if the debt were enforceable, and in NSW the debt is extinguished altogether. Court judgments are different and can be enforced for much longer. Before paying an old debt, work out the dates and get free advice.

This guide is part of the debt option decision checklist. It is general information only; limitation law has exceptions and you should check your own situation.

Limitation periods for consumer debts

These are the general periods for simple contract debts. Different periods apply to court judgments, debts secured by a mortgage, and some government debts; Commonwealth debts such as tax and Centrelink overpayments have their own recovery rules. Check the current Act on your state's legislation website or ask a community legal centre.

When the clock starts and restarts

• Start: usually when the creditor could first sue — for a credit card or loan, typically the date of default or the first missed payment that was not made up.
• Restart: in most jurisdictions the clock restarts if you make a payment or acknowledge the debt in writing before the period expires.
• After expiry: whether a later payment or acknowledgement revives a statute-barred debt depends on the jurisdiction. In NSW the debt is extinguished and cannot be revived. Elsewhere, get advice before paying anything on a debt you think is statute-barred.
• Court judgment: if the creditor obtained a judgment before the period ended, the judgment can be enforced for a much longer period, often 12 years or more depending on the state.

Worked date examples (illustrative)

Example 1 — Victoria, no contact. Ravi's last credit card payment was 3 March 2019. The account defaulted in mid-2019 and was sold to a debt buyer. No payment or written acknowledgement since, and no court action. Six years from the default date runs out in mid-2025. In October 2026 the debt is very likely statute-barred.

Example 2 — Queensland, part payment. Tara's personal loan defaulted in January 2020. In February 2024 she paid $50 after a phone call. That payment likely restarted the clock, so the period now runs to around February 2030.

Example 3 — Northern Territory. A phone bill became due in April 2023 and has not been paid or acknowledged. The 3-year period ran out around April 2026.

Example 4 — NSW, judgment. A collector obtained a default judgment in the Local Court in 2021 for an old card debt. The 6-year contract period no longer matters; the judgment is enforceable and the collector can take enforcement steps. Talk to a community legal centre about setting aside or paying the judgment.

If a collector contacts you about an old debt

1. Do not pay or sign anything until you have checked the dates.
2. Ask for details in writing: original creditor, date of last payment, date of default, and whether there is any judgment.
3. Check your credit report: a default stays for 5 years from listing, which can help date the debt.
4. Write to the collector stating that you believe the debt is statute-barred, if that is the case. The National Debt Helpline has sample letters.
5. Complain if the collector threatens legal action on a debt it knows is statute-barred. The ACCC and ASIC Debt collection guideline says collectors should not mislead you about this. You can complain to AFCA if the collector is a member, and report conduct to ASIC or the ACCC.

See debt collectors and your rights.

How statute-barred debts fit with other options

• A statute-barred debt is usually not worth including in a debt agreement or paying under a plan; ask a counsellor before you list it.
• In a bankruptcy, statute-barred debts are generally not enforceable claims; your trustee will consider them.
• If most of your debts are statute-barred or close to it, you may not need a formal option at all.

Compare with negotiating a payment plan or settlement and the debt agreement cost example.

Frequently asked questions

Does a statute-barred debt still show on my credit report?

A default is removed 5 years after it was listed. A debt can be statute-barred and still listed if the default was recorded late, or no longer listed while still enforceable. The two time limits are separate.

Can a collector still contact me about a statute-barred debt?

In most states a collector may ask for voluntary payment but should not mislead you about legal action or harass you. In NSW, because the debt is extinguished, demanding payment can raise more serious issues; get advice.

Does speaking on the phone restart the period?

The restart rules are generally about payments and written acknowledgements signed by you, not phone calls. Avoid making token payments on old debts without advice.

Sources

• NSW Legislation — Limitation Act 1969
• Victorian Legislation — Limitation of Actions Act 1958
• Queensland Legislation — Limitation of Actions Act 1974
• National Debt Helpline — sample letters for statute-barred debts
• ASIC and ACCC — Debt collection guideline