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Debt Statute Of Limitations

Ontario Debt Statute of Limitations

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Debt is probably the harshest word to hear for anyone in debt. But what to do, as there is no other way to avoid financial hurdles that come in the way. Loans are the easiest way to get extra cash whenver you need it. With its high availability, they have become one of the greatest options as well.

However, the real problem arise when the debt keep mounting and your monthly payments are not enough to keep track of your debt. In such situation, when you are unable to pay your debt and get caught in adding debts that you can’t afford, you are left with only one option: Never taking out a loan and never racking up debt. That means, not getting a house or a car, even in need.

get out of credit card debtBut if you carry your research and have a budget laid out, getting a loan is not an issue, rather a luxury.

Without research and budget, you will not only start incurring debt but also your credit score and credit report will be badly affected too. Besides this, there is a high chance that the lender get the services of debt collection agency to get you pay off your debts quickly. Don’t know what a debt collection agency is? Find out below.

Debt Collection Agency

A debt collection agency is a company or firm engaged by a lender to assist in the collection of debts owed by borrowers. In order to convince customers to pay what they owe, debt collection companies often use far more relentless and aggressive approaches than lenders.

These companies can also sue you if you refuse to pay after a set number of inquiries if you have a substantial outstanding debt. You may have heard horror stories about dealing with debt collectors from friends or family members, and we can promise you that it is not a pleasant process.

Of course, there are laws that govern what they may and cannot lawfully do in order to recover your debt. They can call you, your friends and relatives (but only to get your phone number and address), your workplace (to verify employment), and many other things. They aren’t permitted to phone you at certain hours, and they aren’t allowed to use threatening or abusive words.

Check out the Collection and Debt Settlement Services Act for a more in-depth look at these rules and regulations. It will tell you all you need to know about what is legal and what isn’t.

Can Statute of Limitations Eliminate Your Debt?

While everyone should pay their debts, some people may think they can get away with it if they wait long enough for the statute of limitations to run out. The statute of limitations is a legislation that establishes the maximum amount of time that people have from the time of the original offence to take legal action. The exact date of the law is determined by the province in which you live. The statute of limitations in Ontario is two years long.

While it’s true that the debt collector will be unable to sue you in court for the money you owe if enough time passes, that doesn’t mean you’re out of the woods. The fact that they can’t sue you doesn’t mean the debt will vanish on its own.

It will still be your responsibility to pay (and they will continue to harass you until you do), and it will have a bad impact on your credit record and rating. So, if you wait long enough, you may avoid legal action, but your credit will be ruined and recovery will take a long time.

However, there is something else you need know about this “waiting game” if you intend to take advantage of it. The limitation will reset if you acknowledge the debt or make a partial payment, and the term will be extended for another two years.

Is a Debt Collector Harassing You or Breaking the Law?

Despite the numerous laws and regulations in place to protect customers from debt collectors, some of them will continue to go beyond what they are legally permitted to do. Even though the Ontario statute of limits is set at two years, the collector may still try to sue you in the hopes that you are unaware of Ontario’s statute of limitations rule.

There is something you can do if you believe this is the case and you are being harassed or they are breaching the law. First and foremost, you must inform them that their behaviours are causing you distress. Express your displeasure with their behaviour and see if it changes. You can register a complaint with the government if it doesn’t.

You’ll have to supply the government with supporting documentation and proof, such as phone recordings, letters, or testimony from friends, family members, or your workplace. While most debt collectors follow the rules to avoid getting in trouble or losing their licence, this isn’t always the case, so being prepared for anything is a smart idea.


To summarise, the statute of limitations can help you avoid being sued because of your debts, but it does not totally eradicate the debt. The loan is still your responsibility to repay, and if left unpaid for an extended period of time, it will have a significant negative impact on your credit score and report. So, rather than allowing your debts take their course to avoid being sued, try to figure out a method to pay them off before things get to this point.

At Lionsgate, we specialize in helping people get the extra cash they need, obtain funding for private mortgages, as well as for other real estate transactions. If you are looking to buy land in Canada, get a mortgage or apply for a loan, fill the form below. Or, You can leave us a message and we will try to connect you with local lenders and sources that best meet your needs.

If you found this article helpful, please share it on your timeline and with someone you care about. Also, visit our blog to read similar helpful articles on finance, real estate, and getting mortgages.

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