Statute Barred Debt Policy

Purpose
Legal Framework

Repayment of Statute Barred Debt
Applications for Housing Assistance

Purpose

This policy outlines Housing ACT's position when a customer has a debt in connection with a rental tenancy, but recovery of the debt is barred by Statute.

For the purposes of this policy, the term Statute Barred Debt means any outstanding debt where repayment of the debt can no longer be pursued due to the provisions of either the Limitations Act 1985 or the Bankruptcy Act 1996.

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This policy is consistent with the following legislation:

Limitations Act 1985

The Act provides that legal action to recover a debt cannot be commenced or maintained through the Courts following the expiration of a specific period. In the case of tenancy debt, this period is six (6) years. Expiration of the period does not expunge the debt as if it had never existed, but once this period has elapsed, the debt becomes "Statute Barred".
This period commences at the most recent of;

  • the date the debt first accrued
  • the date on which the customer last acknowledged the existence of the debt, for example, by entering a repayment arrangement
  • the date on which the customer last made a payment against the debt.

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Bankruptcy Act 1996

Where a customer declares bankruptcy, debt becomes "Statute Barred". Depending on the customer's financial situation, payments against a debt may be required under the terms of the Bankruptcy Act. Responsibility to determine whether payments are required rests with the Trustee of the bankruptcy. The debt is notified to Insolvency and Trustee Service Australia in the event payments become necessary under the Act. Subsequent discharge of the bankruptcy relieves the customer of the legal liability to repay the debt, but it does not expunge the debt as if it had never existed. Where one co-tenant is declared bankrupt, the remaining co-tenant/s will be held fully liable for any debt - See standard Tenancy Agreement, Clause 12 of Housing Commissioner's Additional Terms.

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Repayment of Statute Barred Debt

Repayment of Statute Barred debt is not pursued. However, at all times Housing ACT will accept any payments offered by the customer against the debt.

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Applications for Housing Assistance

The Public Rental Housing Assistance Program provides the Housing Commissioner with the discretion to refuse to grant assistance to a person who owes a debt relating to a residential property in the ACT, or who has breached any condition of a tenancy to which the Housing Commissioner is or was a party. Statute Barred debt will be considered, as a breach of tenancy, in the decision of the Housing Commissioner whether or not to exercise that discretion. This applies equally to a current tenant seeking a dwelling transfer or a previous tenant seeking re-housing.

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Further Information
For copies of brochures contact Housing ACT.

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