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111 Waterloo Street, Suite 310
London, ON N6B 2M4

Are my statute barred debts still collectible:

September 5, 2017

This question cannot be answered with a simple YES or NO!

The complexity arises from variants in the application of laws, rules and regulations.  The Limitation Act of Ontario imposes a basic two (2) year period for legal action to be brought before the courts.

In the simplest example let’s assume you owed me $10,000 and we had an agreement that you would make payments of $200 for a period of sixty (60) months to repay the debt including interest.  At first things go well and you make the first twelve (12) monthly payments, then you stop paying me.  From the time you stop paying me, I will have a period of two (2) years to bring the matter before the courts (to sue you).

If I don’t sue you within that time frame I will not be able to sue you or resort to any legal statute to collect the debt.  But here’s the quirk, that doesn’t mean that you don’t still owe me money, unless you go bankrupt or file a proposal under the Bankruptcy & Insolvency Act.  

All debts can have an effect on your credit report whether statute barred or not.  In other words, even though a debt is not collectible through the courts or following a bankruptcy or proposal filing it will still impact your credit report. 

For as long as the debt remains unresolved the creditor may continue to report activity to the credit reporting agencies.  The only way to be sure that the debt is removed from your credit bureau reports is to either pay it in full or settle it in agreement with the creditor or to file either a bankruptcy or proposal.  In many cases a bankruptcy is the cheapest and most effective way of cleaning this mess up.

Call our office for more information at 519-646-2222