Ontario Statute of Limitations

Question: What is the Statute of Limitations act in Ontario for the repayment of an old or bad debt.

Limitations Act on Debt in Ontario

Technically, the statute of limitations in Ontario for debt collection is two years (Update: The act provides that if the defaulted debt occurred before January 1, 2004, the creditor can collect on this debt for up to 6 years but effectively this period has now expired on most old debts).

Regardless of what the Limitations Act may say there are a few things you should know:

  1. Debt collectors may still pursue you for the money. Any acknowledgement that the debt is yours or you owe the money or any payment on the principal or interest owed (even one penny) can reset the two-year limitation period.
  2. 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.
  3. There are certain circumstances that can extent the limitation period of a debt (such as debts pursuant to the Family Law Act) as well as exceptions to the Limitations Act surrounding certain outstanding judgments, fines, taxes, student loans, environmental claims, and other specified debts set out in the Limitations Act.

If you owe money and are concerned about having to repay that debt, we suggest you consult a licensed debt advisor today to ask about your particular situation.

Join the Conversation

  1. J. Douglas Hoyes

    Hi A. You are correct, in Ontario the limitation period for typical debts, like credit cards, is two years. To obtain a judgement, the credit card company must commence legal action within two years of the date of last activity. Since the last payment was in 2006, obviously more than two years has passed. Your ex husband has a number of options.

    First, he could simply ignore it. It is unlikely that they will commence legal action given the passage of time. However, the limitation period only applies if the court is informed of all of the facts. Specifically, if the creditor shows up in court, and your ex husband doesn’t appear, it is possible for them to get a default judgement. So, ignoring it is probably not wise. I would suggest the following approach:

    First, whenever legal actions are threatened, it is prudent to consult a lawyer.

    Second, it would also be prudent for him to get a copy of his credit report to determine whether or not the old debt is still being reported on his credit report (it should be gone if it’s 9 years old), and whether or not they obtained a judgement against him many years ago (unlikely, since he would probably already know about that). Since there is a court file number referenced in the subject line of the letter he received, he should also contact the court to obtain whatever paperwork is on file with the court.

    If the court file is authentic, he should defend himself (and again, using a lawyer may be wise). His statement of defense will be:

  2. 1. the debt is more than two years old; and
  3. 2. it’s not his debt
  4. With those procedures he should be able to put this matter to rest.

  5. heather b,

    Hi, I keep getting calls from creditors for a card I hadn’t been able to use since 2010. Are they still allowed to come after me for payment? How does this affect credit rating

  6. Jessica

    I had a collection agency call me today for credit card from almost 6 years ago. I believe the statue of limitations is up as it is 2 years in Ontario. When i answered i said that debt was not on my equifax report and i would look into it and as far as i was concerned it was dealt with. Did i restart the statue of limitations by saying that. Do i keep ignoring them or can they sue me. I also want to add the debt was from a credit card for 1000$ and is now 1900$ from interest

  7. J. Douglas Hoyes

    Hi Jessica. The last activity date is generally the date of your last payment, so no, you don’t “restart the clock” by talking to them on the phone. It would appear that they are well past the date they can sue you. If they do, you could defend yourself in court by simply advising the judge that the limitations period is over, but it’s unlikely that they will sue you at this late date so that should not be necessary.

  8. Eli

    I have been taking with a colection agency and was talking to them about settling and told them that I was the one who owned the debt. The credit card went to collections in 2009 or 2010. I know that the statute of limitation says that after 2 years they can not peruse sueing you. I know that I did talk to them about the debt and wanting to pay it off. Would this in any way reset the statute of limitation by letting them know that the debt is mine and wanting to pay it. I also started perusing getting a loan with a company that they provided till I found out what the interest rates were, would something like that reset the statute of limitation. I see the last post there says that you can’t reset it by talking to them on the phone I just want to Clairfy that because they threatened to sue me over my negligent of dealing with the fact. Just want to know so I can deal with everything properly. If you have any advice that would be great

  9. J. Douglas Hoyes

    Hi Eli. First, let me state that our post is general in nature, and should not be construed as legal advice. Only a lawyer can give legal advice. Also, our post only applies in Ontario, as the laws will be different in different jurisdictions.

    As for your question, the collection agency can continue to call you even after two years. The Limitations period applies if they take you to court; your defense can be that the debts are more than two years old. The time period is generally accepted to start when you last made a payment. Talking on the phone does not generally reset the time period, because there is no way to prove when a phone conversation took place. For full details, you could either talk to a lawyer or discuss it with a licensed insolvency trustee who could review your case in more detail.

  10. J. Douglas Hoyes

    Hi Donna. If he signed for the debt, he is responsible for it. However, if no payments were made in the last seven years, and if they bank hasn’t yet taken him to court, it is likely that there is no way for the bank to collect the money. I would suggest he start by getting a copy of his credit report to see how old the debts are. It would appear that they are so old they won’t even appear on his credit report. If that’s the case, he probably doesn’t have to do anything.

  11. vince

    i have received many calls in the past few years from different collection agencies about a credit card debt,i just received one from the bureau of canada asking me to pay my balance immediately,how do i find out about the date of limitation of my last payment because honestly i don;t remember.
    i would appreciate your answer

  12. Dani

    Hi. How about Line of Credit from a bank? Is it also considered a “credit card” debt?
    What happens after 7 years? Would my credit be back to “normal”? And if I apply for a credit card then the bank would have no record of the past?

  13. Jhon

    Hello ,

    I own the city of toronto 20k, for traffic tickets. The tickets are about 5 years old or more. How ever a collection agency made contact with me around 2 year and a half ago from today. Is the limitation period past due? Can they take me to court? I really do not have that amount.

    Thanks,

  14. Michele

    HI, I have over the course of month started receiving calls from a collection agency under a name I haven’t used in 14 years. I called back this am and she stated this is from BMO for auto loan. I advised her I have not used this name in so many years and never had a car loan with them nor a bank account. I did however have a boat loan with them ( this I did not say to them ) and was before 2009 I believe. Told her she would have to get more info. She said this is from 2009 for $19,000. I replied I did not know of auto loan and that even so the limitations has expired. She replied back since your quoted the limiations act she will contact her client and advise and hung up. Did this start the 2 year over ?
    Thanks

  15. J. Douglas Hoyes

    Hi Vince. The easiest way to find out your last activity date would be to get a copy of your credit report, which will show the last activity date.

  16. J. Douglas Hoyes

    Hi Dani. A line of credit is not a credit card, but they are both types of unsecured debt, so they are both treated the same under the Limitations Act of Ontario.

    If you had a credit card at ABC Bank and didn’t pay it, and assuming they didn’t pursue you for it, after six or seven years it would be purged from your credit report, so if XYZ Bank ran a credit check on you it wouldn’t show up. However, it may still exist in ABC Bank’s computer system, so they may remember the debt.

    This is different than the 2 year limitation period, which is the period after which it becomes more difficult to sue your for a debt.

  17. J. Douglas Hoyes

    Hi Jhon. As a general rule the limitations periods do not apply to government debts. If you don’t pay a traffic ticket a note pay be placed on your record, making it difficult to renew your license.

    However, in your case, if it has been 5 years and they have been turned over to a collection agency, it is unlikely they will be taking you to court. Your best strategy may be to begin saving money, and attempt to make a deal with the city or the collection agency if they should ever contact you again.

  18. J. Douglas Hoyes

    Hi Michele. Talking to a creditor does not restart the limitation period. The limitation period starts from the last activity date, which is generally defined as the date you made the last payment, because that’s a verifiable date. The date of a phone call is not easily verifiable, so a simple phone call does not restart the limitation period.

  19. Steve

    I have 2 questions, if you don’t mind.
    1. If I decide to leave the country and start a new life somewhere else, would my creditors be able to find me? If I apply for a credit card in a new country, would they know about my credit here in Canada?

    2. If I am staying and decide to delinquent on my cc bills with ABC and FHG banks and stop all activities with them, but I open an account with XYZ bank, would XYZ bank know about my delinquencies with the 2 banks and not offering me a CC card and/or would the 2 banks be able to take my money out of XYZ bank? Also, would the 2 banks be able to find my info (phone or workplace) through XYZ bank?

  20. J. Douglas Hoyes

    Hi Steve.

    1. Generally your credit report in Canada only covers Canadian debts, so if you move to a new country it’s likely that you would be starting out in that country with no credit. It is unlikely they would access your Canadian credit report.

    2. Any bank can access your credit report, so they can find out that you had credit cards with other banks. Some of your personal information, like your address, is on your credit report, so it is available to other banks. For the first bank to take money out of the second bank without your permission they would generally need a court order; they can’t just remove the money.

    Hope that helps. If your debts are significant, a consumer proposal may be an option for dealing with them once and for all.

  21. David

    Hi

    I had a house and couldnt pay the mortgage. mortgage company got judgement on November 2009 and sold the house. Judgement was valid until Jan 28 2010.
    They sold the house for $530,000 and my mortgage was about the same amount, however they are claiming that they lost $99,000 and they calculate the interset at 9.9% and now the debt is $61,000.
    Mortgage insurance company trying to get a motion to renew the judgement after 6.5 years.
    My question is under statue of limitation they can not renew the judgement after 6 years is past, how can I get dismiss on this motion.

    Thanks

  22. Tota

    I have a situation where a creditor filed documents to collect on a debt prior to the statute of limitation ran out but served me 3 months after the statute of limitation ran out what should I do?

  23. J. Douglas Hoyes

    Hi David. This is a complex area of law, so if you want to make a motion to court you should consult a lawyer. The rules for judgments are different than for normal unsecured debts, and your question is more complicated than we can answer in general terms on this site.

  24. J. Douglas Hoyes

    If you are sued, you, or your lawyer, can advise the judge that the Limitations Period has expired. It is up to the judge to then determine next steps.

  25. Dan

    Hello..I am paying a collection agency..just started my first payment. Since you said not to pay them but to talk to who I owe the bill to…can I stop paying the collection agency and make arrangements with the person I owe the money to? Thank you

  26. Dawn

    I had a creditor call me for a cell phone account. I apparently had an account in 2002 and I do not recall ever being with that company, asked she send me a email of the claim and told her I was not paying for a phone from a company i am sure I was never with. What can be done does it fall under the statue of limitations? I mean it’s from 14 years ago I never even received written notice of debt just phone calls

  27. dave

    Hi, if I have a money judgement against me, is there a expiration date for this judgement? I know in Quebc they have a “sattus of Limitation” on the money judgement, how about Ontario

    Thanks

  28. Lynn

    My husband just received a collection letter concerning an outstanding bank overdraft from 2011. This is the first contact. Does the statute apply here? If we don’t respond, what happens next? Thank you.

  29. J. Douglas Hoyes

    Hi Dan. Yes, if the original creditor agrees, you can deal with them directly. In some cases they turn the account over to a collection agency and won’t talk to you, but it doesn’t hurt to ask.

  30. J. Douglas Hoyes

    Hi Dawn. If the debt is from 14 years ago it is unlikely they can collect, so unless they can provide you with a court order requiring payment, payment is not necessary. To be sure, you could get a copy of your credit report to see if the debt still exists; it’s likely that it does not even appear on your credit report, so it is not impacting you in any way.

  31. J. Douglas Hoyes

    Hi Dave. A lawyer could review the judgement and give you a specific answer, but in general, in Ontario, there is no limitation period for a judgement. They do not expire with time.

  32. J. Douglas Hoyes

    Hi Lynn. Yes, the limitations act applies for bank overdrafts, so unless the bank has a judgement against you already, it is unlikely that they will be able to obtain one. If you don’t respond they will probably continue to send you letters. You could simply advice them that the debt is past the limitation period, and you are unable to pay, and they will probably eventually leave you alone.

    If you have other debts it may be prudent to consider a consumer proposal or bankruptcy to deal with all of your debts, even the old ones.

  33. Levi

    Hi
    I have 2 questions
    I was advised to send the collection agency this sample letter.
    Dear [Creditor]:
    I am writing to inform you that my current income from being self employed is not enough for me to be able to make any payments towards my alleged debt at this time.
    I respectfully request that you contact me by letter only going forward; please do not contact me by telephone. I will respond to any letters you send to me in a timely manner.
    If at anytime I am in a position to resume payments on the alleged debt, I will contact you immediately to make appropriate arrangements.
    I thank you for your patience and understanding during this difficult time.
    This communication is provided solely for the purposes of notifying you to communicate in writing only and does not constitute an acknowledgement of the alleged debt described above.

    Can this registered letter constitute “acknowledging the dept”
    Also after I sent the letter and was notified through Canada Post that it was received the woman from the collection agency contacted me. It didn’t go well. Unfortunately I did not hang up fast enough, before biting so many hooks she cast.
    She was extremely aggressive, yelling non stop into the phon… when I told her I sent the letter, she claimed to “know” I have money, she used every bullying cross firing tactic until I eventually hung up. I told her I have no money. I told her I was self employed , she screamed for my business number and went over board when I told her I don’t have one. She was incredibly extreme with her aggression. She knew exactly what she was doing and I was not prepared for this kind of treatment.
    Is there any way that anything I may have said can start an acknowledgement of the alleged dept over from that phone call.
    It felt like she got what she was after. It did all happen so fast. I likely said I don’t have the money to pay the dept without saying alleged dept.

    Your Help is very much appreciated

    Sincerely

  34. Ray L.

    Hello J
    How do i get a copy of my credit report and does it cost to get it
    Thank You

  35. Alfred

    I recently looked at my credit bureau and there is a judgement dated Oct. 2011, it is now March 2017, the status is Disposition Unknown. I am unaware of this judgement. Ten years ago I had a debt with the bank and I paid it off. I no longer have records that the debt was paid. In fact I’m not sure this is the same debt. If I ignore this will it disappear from my credit bureau? Should I contact the bank? Does the statue of limitations apply here (I live in Ontario)? Should I contact the credit bureau and ask them to remove it?

  36. Andrew

    Hello i am on odsp and i have some debts with credit cards i know the statue of limitations is 2 years in ontario where i reside my question is can i be taking too court after the 2 years are passed if i decide too become employed again

  37. Wendy

    Hi,
    My adult daughter is being hounded by a collection agency for 2 City of Ottawa (Ontario) fines for bylaw offences. One is from 2009 and one is from 2014. These fines are regarding smoking, trespassing or boarding a bus without paying. For one of the fines she was only 14 years old. We were never taken to court.
    Number 1, does the statue of limitations regarding old debts apply to fines for bylaw offences?
    Number 2, could this affect getting her full Driver’s Licence as we are just in the process of doing that right now. Thanks for any advice.

  38. J. Douglas Hoyes

    The issue in most cases is not whether you acknowledge the debt, since the creditor already has proof that the debt exists. In most provinces there is a Limitations Act that determines when a creditor no longer can sue you for the debt. In Ontario, the Limitations period is two years for debts like credit cards, so if you haven’t made payments in two years, it is unlikely that they can successfully sue you, whether or not you have “acknowledged” the debt.

  39. J. Douglas Hoyes

    Hi Ray. You can contact the credit reporting agencies directly:

    TransUnion and Equifax. They are required to give you one free credit report each year.

  40. J. Douglas Hoyes

    Hi Alfred. Judgments do not automatically disappear, so you should find out who obtained the judgement, and contact them to have it removed, or deal with it if you legitimately owe the money.

  41. J. Douglas Hoyes

    Hi Andrew. In Ontario, the credit card companies must sue you within two years if they want to obtain a judgement. If they don’t meet the two year deadline, they lose that option, regardless of whether or not you go back to work.

  42. J. Douglas Hoyes

    Hi Wendy. As a general rule, court fines are not subject to a limitations period. However, since these may or may not be “court” fines, I can’t give you a specific answer. If it’s a collection agency that is hounding her it is unlikely to affect her Driver’s Licence, but to be sure you could contact the Ministry of Transportation and see if there is anything showing up on her record that would impact her ability to get a full driver’s license.

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