In most of Australia, a creditor has six years from the date a debt became payable to take you to court over it; in the Northern Territory that window is three years for simple contract debts, and longer periods apply to court judgments and debts secured by property. That is the short answer to how long a debt can be chased in Australia, but the clock can be restarted by a single payment or a written acknowledgment, so the practical answer depends on what you’ve done since the debt fell due.
Time Limits by Type of Debt
Credit Cards, Personal Loans, and Unpaid Invoices
For everyday unsecured debts, the limitation period is six years in New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, and the ACT. The Northern Territory is the outlier at three years for debts arising from simple contracts not executed as deeds.1AustLII. Limitation Act 1981 – Sect 12 Actions in Contract, Tort Etc.
If you live in the NT with an old credit card balance or unpaid personal loan, that three-year window closes fast. Elsewhere in Australia, six years is the number to remember.
Court Judgment Debts
If a creditor has already sued you and obtained a judgment, the window to enforce that judgment is much longer. In most jurisdictions it runs 12 years from the date of judgment. Victoria and South Australia extend it to 15 years.2Victoria Legal Aid. Reasons You Might Not Have to Pay Your Debt
Mortgages and Other Secured Debts
Home loans, car loans, and other debts secured against property carry longer limitation periods. Victoria sets 15 years for the principal borrowed.2Victoria Legal Aid. Reasons You Might Not Have to Pay Your Debt New South Wales allows 12 years to recover principal but only six years for unpaid interest. The precise figure depends on your state or territory.
When the Clock Starts Running
The limitation period begins on the date the debt first became due and payable. For a credit card, that’s typically the point at which you first missed a required payment or the creditor issued a default notice. For an invoice, it’s the day after the payment deadline passed.3ACT Government. Statute Barred Debt Policy
The clock is not tied to when the creditor first contacted you, and it does not reset just because the debt was sold to a collection agency. It runs from when the debt became legally recoverable.
What Restarts the Clock
This is where people lose the protection they thought they had. Two things consistently reset the limitation period across Australian jurisdictions:
- Making a payment. Even a small part-payment restarts the period from the date of that payment.3ACT Government. Statute Barred Debt Policy
- Acknowledging the debt in writing. Signing a repayment arrangement, sending an email saying you owe the money, or even asking for a statement on the account can qualify as a written acknowledgment and restart the clock.
The written acknowledgment rule catches people out. A collector phones about a five-year-old balance and you reply by email saying “I know I owe this but I can’t pay right now.” That single email can restart the full six years. The word to watch is “written.” A verbal admission over the phone generally does not reset the period, because Australian limitation statutes require the acknowledgment to be in writing.
Filing court proceedings within the limitation period also preserves the creditor’s claim. Once a lawsuit is lodged in time, the limitation period stops mattering for that action, even if the case drags on for years.
What Statute-Barred Actually Means
Once the period expires without a payment, written acknowledgment, or court filing, the debt becomes statute-barred. If the creditor sues you after that, you can raise the expired limitation period as a complete defence and the court will generally dismiss the claim.3ACT Government. Statute Barred Debt Policy
Statute-barred is not the same as erased. The debt still technically exists and the creditor can still ask you to pay voluntarily. What they lose is the ability to force payment through the courts.
Credit Report Timing Is Separate
A different clock governs how long a debt affects your credit file, and it runs independently. Under the Privacy Act 1988 and the Credit Reporting Code, a default listing stays on your credit report for five years from the date the credit provider lodged it with the credit bureau.4OAIC. What Stays on a Credit Report?
Paying does not remove the listing early. You can ask the bureau to update it to show “paid,” but the entry stays for the full five years. After that, the bureau must remove it regardless of whether you paid.
The five-year credit reporting window and the six-year limitation period overlap but are not linked. A debt can drop off your credit file while the creditor still has time to sue, or a statute-barred debt can still show on your credit report if the listing is less than five years old.
If a Collector Contacts You About an Old Debt
The ACCC and ASIC jointly enforce consumer protection laws that apply to debt collection, including the Australian Consumer Law and the ASIC Act.5Australian Competition and Consumer Commission. Debt Collection Guideline for Collectors and Creditors – April 2021 These laws prohibit physical force, undue harassment, misleading or deceptive conduct, and unconscionable behaviour.
On statute-barred debts specifically, a collector who threatens court action over a debt they know is out of time is engaging in misleading conduct, because court is no longer a genuine option. ASIC has investigated collectors who pressured people into paying old debts by implying legal action was imminent when it was not legally available.6Australian Securities & Investments Commission. Report 55 Collecting Statute-Barred Debts
Collectors can still ask you to pay a statute-barred debt voluntarily. If they threaten court, demand payment under false pretences, or call at unreasonable hours, you can report the conduct to the ACCC or ASIC.
One practical caution: because a written acknowledgment or a small payment can restart the clock, be careful how you respond to any contact about an old debt. If you think a debt may be statute-barred, get advice before you write back or agree to anything.
A Note on Bankruptcy
Bankruptcy is a separate framework, not a limitation period. Entering bankruptcy usually stops individual creditors from pursuing you, and once bankruptcy ends most pre-bankruptcy debts are discharged.7Australian Financial Security Authority. The End of a Bankrupt’s Period of Bankruptcy Some debts survive bankruptcy, including court fines, child support, HELP debts, and debts incurred through fraud, and for those the ordinary limitation period still governs whether the creditor can sue.
Where to Get Free Help
The National Debt Helpline offers free, confidential financial counselling on 1800 007 007, weekdays 9:30 am to 4:30 pm.8National Debt Helpline. Financial Counselling A financial counsellor can help you work out whether a specific debt is statute-barred, advise you on your rights if a collector is contacting you, and help you decide how to respond. You should never pay for financial counselling; anyone charging for it is a red flag. Legal aid services in each state and territory also give free advice on debt disputes, including help raising a limitation defence in court.