The code snippet doesn't actually enable the timer, or the peripheral clock to it. It should not work at all as is.

That said... An intermittently working timer could indicate some hardware problems. Try pressing on the IC or flexing the PCB a little. If it stops you have bad solder joints. Hit it with a cold spray... Are the voltage rails stable?

Try toggling an LED in the main loop with a delay. Does that also hang when timer 1 is not counting as expected?

Aside from hardware issues, you could be stuck in an interrupt routine from some code you haven't shown here. Are you sure you have only enabled the one interrupt?