Statute of Limitations on Debt in Australia (2026 Guide)

Quick Answer: In Australia, most consumer debts have a statute of limitations of 6 years from the date of the last payment or acknowledgement of the debt (varies by state — Queensland is also 6 years, NSW 6 years, Victoria 6 years, WA 6 years, SA 6 years). After this period, the debt is "statute-barred" — the creditor loses the right to take court action to recover it. Critically: a statute-barred debt does NOT automatically disappear from your credit file. Credit file retention periods (5 years for defaults) are separate from the limitation period. If collectors are pursuing a statute-barred debt, you have legal defences. If old defaults are still showing on your credit file beyond their 5-year retention period, they can be removed under the Privacy Act 1988. Australian Credit Solutions — 98% success rate. No Win No Fee. ASIC ACL 532003. Industry Excellence Award 2022, 2023 & 2024. 4.9/5 from 976+ reviews. Over 5,000 Australians helped since 2014.

Understanding the difference between a debt becoming statute-barred and a credit file entry expiring is critical — they are two completely different legal timelines.

What Is the Statute of Limitations on Debt?

The statute of limitations is the period within which a creditor must take legal action to recover a debt. After this period expires, the creditor cannot obtain a court judgement for the debt — the legal remedy is lost.

Limitation periods by state (most consumer debts):

What starts the clock? The limitation period generally starts from the date of the last payment made on the debt, or the last written acknowledgement of the debt by the debtor.

What resets the clock? Making a payment (even $1) or signing any document acknowledging the debt resets the limitation period from that date. Collection agencies sometimes pressure debtors into small "goodwill payments" — this can restart the limitation period on an old debt.

Statute-Barred vs. Credit File Retention — The Critical Difference

This is where most confusion occurs:

Statute of limitations (6 years): The period within which a creditor can sue you for the debt. After 6 years, they cannot get a court judgement. The debt still legally exists — it's just unenforceable through courts.

Credit file retention period (5 years for defaults): The period a default listing remains on your credit file under the Privacy Act 1988. These two timelines are completely independent of each other.

Example: A default listed in January 2018. 5-year retention expired January 2023 — should be removed from credit file. The 6-year limitation period expired January 2024 (if last payment was January 2018) — cannot be sued after this date.

It's possible to have a statute-barred debt (can't be sued) that still has time remaining on the credit file. It's also possible to have a credit file that's clean (default expired at 5 years) but the debt is still technically enforceable (within 6 years). You may also want to explore how the Credit Reporting Code protects you.

What Debt Collectors Can Still Do After the Limitation Period

A statute-barred debt is not cancelled — it still exists. Collectors can: For more detail, see our guide on debt collector rights in australia & your credit file.

• Contact you requesting payment (within contact rules)
• List a default on your credit file (if within the 5-year credit file window)
• Accept voluntary payment if you choose to pay

Collectors cannot after the limitation period:

• Take court action to obtain a judgement
• Threaten court action they know is time-barred (this may be misleading conduct)
• Report a new default for an old statute-barred debt (the credit file has its own rules)

What To Do if a Collector Contacts You About an Old Debt

Step 1: Do not acknowledge the debt or make any payment until you've confirmed the limitation period.

Step 2: Calculate when the last payment was made or the debt was last acknowledged. If more than 6 years ago (outside NT), the debt is statute-barred.

Step 3: If statute-barred, you can write to the collector stating: "I am not acknowledging this debt. I believe this debt is statute-barred under the [state] Limitation Act. Please cease collection activity and confirm in writing that this is the case."

Step 4: Check your credit file — if a default from this debt is on your file, check whether it's within the 5-year credit file retention period. If beyond 5 years, it should be removed.

Case Study: Helen, Victoria — Statute-Barred Debt, 7-Year-Old Default Still Showing

Helen, 55, a retail manager from Geelong, was contacted by a collection agency in 2025 about a $2,300 Citibank credit card debt. The last payment Helen had made was in February 2019 — more than 6 years before the contact in 2025. The debt was statute-barred under the Victorian Limitation of Actions Act 1958.

Helen also had a default from this debt on her Illion credit file — listed in August 2019. The default was now over 5 years old (listing date August 2019, current date in 2025 = 5 years 4 months). The default should have been automatically removed by Illion at the 5-year mark (August 2024) — it hadn't been.

Australian Credit Solutions: (1) drafted a statute of limitations letter to the collection agency, which ceased contact, and (2) formally requested Illion remove the expired default. Default removed from Illion within 8 business days. Helen's Illion score improved from 467 to 578.

Helen paid nothing until we succeeded.

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Frequently Asked Questions

What is the statute of limitations on debt in Australia? Most consumer debts in Australia have a statute of limitations of 6 years (3 years in the Northern Territory) from the date of the last payment or acknowledgement of the debt. After this period expires, the creditor can no longer obtain a court judgement for the debt — it becomes "statute-barred." The debt still legally exists but is unenforceable through court action.

Does paying off an old debt restart the statute of limitations in Australia? Yes — making any payment on a debt, even a small partial payment, generally resets the limitation period from the date of that payment. Signing any document acknowledging the debt also restarts the clock. Before making any payment on a very old debt, calculate whether the limitation period has already expired — if so, a payment could revive an otherwise unenforceable debt.

Does a statute-barred debt disappear from my credit file in Australia? No — the statute of limitations and credit file retention periods are completely separate timelines. A statute-barred debt (can't be sued for it) may still have time remaining on the credit file's 5-year default listing period. Conversely, a default may have expired from the credit file (5 years passed) while the debt is still technically within the 6-year limitation period. Check both independently.

Can debt collectors contact me about statute-barred debts in Australia? Collectors can contact you about statute-barred debts requesting voluntary payment — but they cannot legally take court action after the limitation period expires. Threatening court action on a statute-barred debt may be misleading conduct under Australian Consumer Law. If contacted about a very old debt, determine whether it's statute-barred before responding or making any payment.

How do I know if my old credit file default has expired? Pull your credit reports from all three bureaus (Equifax, Experian, Illion — free at least every 3 months). Check the listing date of any default. If the listing date is more than 5 years ago, the default should have been automatically removed. If it's still showing, the bureau has failed to remove it at the retention expiry — this can be formally disputed and removed.

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Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice.