Limits within Limitations

Canadians may have a possible way out from under the haunting of old debts—the only catch is that it can still ruin your credit profile.

The Statute of Limitations can protect from creditor harassment and judgement proceedings if your debt is old enough to fall under the limitation period. The basic limitation states that no legal proceedings can be started against an individual after the 2nd anniversary of the day that the debt/claim is incurred/discovered.

This does not mean that the debt goes away!

Even if the limitation period has expired, the debt can remain on your credit bureau for 6-7 years from the date of the account’s final activity; this would make qualifying for future credit difficult.

Once it falls off your credit bureau, there is nothing stopping the creditor from selling the debt to a collection agency who will then start reporting on your bureau.

The Statute of Limitations has its exceptions to the rule—debts that have arisen from outstanding taxes, student loans, spousal support—those do not have a limitation and will eventually have to be taken care of.

If you find yourself in this situation and the debt is not going away, do not ignore it! Feel free to reach out to one of our Licensed Insolvency Trustees for a free consultation to discuss the various ways we can help you with a fresh financial start!

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Crowe Soberman Inc.
Licensed Insolvency Trustee

2 St. Clair Ave. E, Suite 1100
Toronto, ON M4T 2T5

Toll Free: 1.877.929.2501
GTA: 416.929.2500