Ontario Statute of Limitations
Question: I have an old credit card debt in the amount of $14,000. Early in 2005 I had to stop making the minimum payments because I went on CPP Disability and my income was reduced by 60%. I was getting calls from the collections department of this company daily. I wrote a letter to them asking them not to call anymore and I requested all correspondence in the future to be by mail. I also offered them to settle the debt for 40% of the amount owing. I had about $5000 in equity in my home available to pay this at that time. Shortly after that I received a phone call from them informing me my offer was denied. I also reminded them I requested that all correspondence to be by mail. From that time on I haven’t received another phone call or letter requesting payment of the debt. I looked up the Statute of Limitations act in Ontario.It states that after Jan 01 2004 the Statute of Limitations on debt in Ontario changed from 6 years to two years from the last day the debt was acknowledged. It has been past the two year period now and I still have not heard anything from them. Does this mean now that the debt is cleared, and I don’t owe them any more?
Answer: You are asking a complicated legal question, and if you talked to different lawyers you may get two different answers. One intepretation is that you are correct. The other intepretation is that since the debt existed prior to January 2004, the old rules apply.
The real issue is this: regardless of what the Statute of Limitations Act may say, the collectors may still pursue you for the money. Debts remain listed on your credit report for six years from the date of the last collection activity, so this debt will impact your ability to borrow in the future.
However, if you are receiving a disability pension, you have no wages to garnishee, so it is likely that your creditors will not pursue you vigorously. For further information, we suggest you consult a credit counsellor or bankruptcy trustee.