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:
- 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.
- 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.
- 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.