When Old Debt Expires: The Limitation Act and Your Rights
An old debt does not chase you forever. Under the Limitation Act 2010, a creditor in New Zealand generally has six years to bring a court claim to recover money, and after that the debt becomes what lawyers call statute barred. Understanding this matters most when a debt collector contacts you about something from years ago, because what you say in that first conversation can change your legal position immediately and permanently.
The part almost everyone gets wrong is what statute barred actually means. It does not mean the debt has been wiped. It means the creditor can no longer enforce it through the courts. The debt still exists, it can still be recorded, and a collector can still ask you to pay it. What they cannot do is get a judgment against you for it. That distinction is the whole subject, and it is why the practical advice in this guide is different from what most people expect.
The three things to remember
Six years is the general limitation period for a money claim. The clock runs from when the debt became owing, or from your last payment or acknowledgement, whichever is later. And statute barred means unenforceable in court, not erased.
Making a payment, even a very small one, or acknowledging the debt in writing, restarts the six year clock from that date. A $5 payment on a debt that was five years and eleven months old gives the creditor another six years. If you are contacted about an old debt, find out how old it is before you agree to anything, pay anything, or put anything in writing.
Why this catches people out
Debt collection files get sold and resold, and an old file can surface long after the original creditor stopped chasing it. The person who contacts you may be perfectly polite and may open by offering a settlement or a small instalment arrangement, because a small payment is worth far more to them than the amount itself: it restarts the limitation period and makes the whole debt enforceable again.
That is not necessarily anyone behaving badly. It is how the law works, and a creditor is entitled to accept a payment you offer. But it means the order of operations matters enormously. Work out the age of the debt first. Decide what you want to do second. Doing it the other way round can hand back a protection you already had.
What this guide does not cover
Limitation periods differ by the type of claim. Six years is the general period for money claims, but there are different rules for other kinds of claim, and specific rules apply in areas such as land and building work. This guide is about ordinary debt: credit cards, personal loans, overdrafts, unpaid accounts. It is general information rather than legal advice, and anything involving a court document you have already received is worth taking to a Community Law centre or a lawyer promptly, because a deadline may already be running.
How the six year clock works
The period runs for six years, and the question that decides everything is when it started. There are three possible starting points, and the latest of them is the one that counts.
What counts as acknowledging a debt
This is where care is needed, because the safest assumption is broader than you might think. A written statement that you owe the money is an acknowledgement. So is a signed repayment arrangement. Asking for a payment plan, confirming a balance in writing, or writing to agree that the debt is yours can all point the same way.
What that means in practice is straightforward. If you are contacted about a debt you think may be old, you do not have to say anything about whether you owe it. You are entitled to ask the collector for information: who the original creditor was, the date of the last payment, and the date the debt became owing. Asking for information is not the same as accepting the debt, and a legitimate collector should be able to provide it.
The date of the last payment you made, the date the debt fell into default, the name of the original creditor, and a statement of how the balance was calculated. Those four things let you work out the limitation position yourself. Keep the request and the reply, because if a claim is ever filed the dates are what the argument turns on.
Late knowledge, and the fifteen year backstop
The Act allows for the situation where you genuinely did not know about a claim. Where a claimant only later gains knowledge of the relevant facts, a late knowledge period of three years from that discovery can apply. Sitting behind everything is a longstop of fifteen years from the act or omission, after which a claim is out of time regardless of when anyone found out.
For ordinary consumer debt these provisions rarely change the answer, because you generally know about your own credit card. They matter more in disputes where a loss was not apparent at the time. They are worth knowing exist, and worth taking to a lawyer if you think one applies to you, rather than assuming either way.
Statute barred is not the same as wiped
Once the six years have passed without a payment, an acknowledgement or a claim being filed, the creditor loses the ability to enforce the debt through the courts. The debt itself does not disappear. Three consequences follow, and they surprise people in different directions.
| What changes | What does not |
|---|---|
| A creditor cannot obtain a court judgment for the debt | The debt still exists as a debt |
| Enforcement through the court, such as an attachment order, is not available | A collector can still contact you and ask you to pay |
| You have a defence you can raise if a claim is filed | You can still choose to pay it, and some people do |
The middle row is the one that causes most of the confusion. People reasonably assume that if a debt cannot be enforced, contact about it must be improper. It is not automatically improper. What is not allowed is misleading you about it, and telling you that you will be taken to court over a debt that is statute barred would be a very different matter from asking whether you would like to settle it.
If a creditor does file a claim on an old debt, the court will not throw it out by itself. Limitation is a defence you have to raise. Someone who ignores court papers because they believe the debt is too old can end up with a judgment entered against them by default, and a judgment is enforceable regardless of how old the underlying debt was. If you receive court documents, respond to them and get advice quickly.
Credit reporting runs on a different clock
Limitation and credit reporting are separate systems and they do not expire together. Default information stays on your credit file for a set period under the credit reporting rules, and the fact that a debt has become statute barred does not by itself remove it. You can obtain your credit report free from each of the credit reporting agencies, and it is the practical way to see what is recorded about you rather than guessing.
Where a No Asset Procedure sits alongside this
These are two quite different mechanisms and they are easy to confuse. Limitation is about time: after six years without a payment or acknowledgement, a creditor cannot enforce in court, but the debt survives. A No Asset Procedure is about insolvency: it actually writes off most of the included debts, but you have to apply, qualify on strict tests, and you can only ever use it once.
If your debts are recent and unaffordable, limitation is not going to help you and a formal insolvency option may. If your debts are genuinely old and nothing has been paid or acknowledged for years, you may already have the protection you need without applying for anything. Working out which situation you are in is the first step, and a free financial mentor can help you do it.
Four situations, worked through
Sina defaulted on a $3,200 credit card in March 2019. She heard nothing for years. In January 2025, a collector rang and offered to settle for a first payment of $20. She paid it, thinking it was a gesture towards clearing an old problem.
What happened: the debt was two months away from being six years old. That $20 payment restarted the clock from January 2025, so the creditor can now enforce it until January 2031. Had she asked for the date of default before paying anything, she would have seen how close it was.
Dave defaulted on a personal loan in 2016 and has made no payment and signed nothing since. In 2026 a collection agency writes to him about it.
Where he stands: more than six years have passed with no payment and no acknowledgement, so the debt is statute barred and cannot be enforced through the courts. The agency is not necessarily doing anything wrong by writing to him, and the debt still exists. If he replies acknowledging it in writing, or pays anything at all, he may restart the clock. His safest course is to seek advice before responding.
Priya receives court papers about a debt from 2017. She is sure it is too old to be enforced, so she puts the papers aside and does nothing.
What happens: limitation is a defence that has to be raised, and the court does not apply it for her. Judgment is entered by default, and that judgment is enforceable. The defence she almost certainly had was lost by not filing it. Court papers always need a response, even when you are confident the claim is out of time.
Tama owes $18,000 across three accounts, all from the last two years, and cannot pay any of it. He has read about statute barred debt and wonders whether waiting is the answer.
Where he stands: waiting six years while creditors are actively pursuing him is not a plan. They can file a claim at any point in that window, and interest and fees continue. His debts are inside the $1,000 to $50,000 range, so a No Asset Procedure or a Debt Repayment Order may be the realistic options. Limitation is a protection for genuinely old debt, not a strategy for new debt.
If a collector contacts you about an old debt
Sources
Checked on 10 August 2026 against the following, with the Limitation Act 2010 itself as the governing law:
- Limitation Act 2010: the six year primary period for money claims, the three year late knowledge period, and the fifteen year longstop.
- Citizens Advice Bureau, What are limitation periods: consumer guidance on how the period runs and what restarts it.
- Community Law, How debts are recovered through the courts: court process and enforcement.
This guide is general information and not legal advice. Limitation is a technical area and the dates decide the outcome, so if a real amount of money turns on it, take it to a Community Law centre or a lawyer. If you have received court papers, do that immediately rather than waiting.
Related guides and tools
- The No Asset Procedure: how debt actually gets written off, rather than becoming unenforceable.
- Debt Collection: your rights when a collector makes contact.
- Debt Snowball Calculator: a repayment order for debt you are paying.
- Budget Calculator: working out what you can actually afford.
🎯 Test Your Knowledge
Complete this 10-question quiz to assess your understanding of limitation periods and old debt
If you've found a bug, or would like to contact us, or learn more about James Graham and Calculate.co.nz.
Calculate.co.nz is partnered with Interest.co.nz for New Zealand's highest quality calculators and financial analysis.
Calculate.co.nz is the sister site of CalculatorHub.com, the world's largest calculator website by tool count.
All calculators and tools are provided for educational and indicative purposes only and do not constitute financial advice.
Calculate.co.nz is proudly part of the Realtor.co.nz group, New Zealand's leading property transaction literacy platform, helping Kiwis understand the home buying and selling process from start to finish. Whether you're a first home buyer navigating your first property purchase, an investor evaluating your next acquisition, or a homeowner planning to sell, Realtor.co.nz provides clear, independent, and trustworthy guidance on every step of the New Zealand property transaction journey.
Calculate.co.nz is also partnered with Health Based Building and Premium Homes to promote informed choices that lead to better long-term outcomes for Kiwi households.
Calculate.co.nz is hosted in Auckland by SiteHost New Zealand.
All content on this website, including calculators, tools, source code, and design, is protected under the Copyright Act 1994 (New Zealand). No part of this site may be reproduced, copied, distributed, stored, or used in any form without prior written permission from the owner.
About & trust: Why Calculate is NZ's most comprehensive · By the Numbers · How we compare · Editorial standards · How we keep data current · NZ finance glossary · Research & data · Financial literacy NZ · About · Privacy policy · Terms of use
Reviewed and maintained. Last reviewed 2026-08-10 and checked on a twice-monthly cycle against IRD, RBNZ and Stats NZ. How we keep data current.
© 2026 Calculate.co.nz. All rights reserved. Building free NZ calculators since 2011.