How Long Can Debt Collectors Try to Collect in Canada?

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A lot of us have been there before. Whether we were naive and missed a few payments, or simply struggling to pay all of our bills, many of us have heard from the dreaded debt collector. And if you’ve ever heard from a debt collector, you know they are relentless.

It seems that the phone calls are endless and never-ending. But is this really true? Is there an end to the harassing calls? How long can Debt Collectors try to collect in Canada? To answer this question, let’s take a closer look at debt collection.

How Long Can Debt Collectors Collect in Canada?

The answer to this question really depends on where you live in Canada. The government of Canada states that debt collectors cannot take legal action after 6 years of the debt being last acknowledged. With that being said, the Statute of Limitations differs from province to province.

In British Columbia, for example, the Statute of Limitations is 6 years. Manitoba, New Brunswick, Nunavut, Nova Scotia, PEI, Yukon, and the Northwestern Territories also have Statutes of Limitations of 6 years.

Alberta, Saskatchewan, Newfoundland and Labrador, and Ontario all hold a Statute of Limitations of 2 years. Quebec holds a Statute of Limitations of 3 years.

But what does this mean? It means that debt collectors can legally pursue your debts for up to the time of Statute of Limitations in your province. If you live in British Columbia, for example, debt collectors can pursue legal action for up to 6 years if you have not taken any action. In Ontario, debt collectors only have 2 years to legally pursue any debts that are owing.

Are there exceptions to this rule?

Yes. In certain cases, the time period in which collection agencies have to collect on debts can be reset. In other words, debt collectors can reset the Statute of Limitations and re-open the debt if certain conditions are met. These conditions are based on the actions of the borrower.

Any type of acknowledgment of debt on behalf of the borrower can result in a Statute of Limitations reset. These acknowledgments can be made in verbal form (ie. telling a debt collector you have intentions to pay your debt in the future) or in the form of a payment.

As soon as you acknowledge your debt or make a payment, the Statute of Limitations period is reset and the creditor can continue to pursue legal actions.

If the Statute of Limitations is up, does this mean I no longer owe money?

Unfortunately, no. All this means is that debt collectors can no longer take legal actions against you in the court of law. Any debt owing will remain on your credit report for 6 years.

Even when the 6 years is up, you still owe the money, you simply can no longer be harassed by collection agencies.

What happens if I don’t pay my debt in Canada?

If you are still within the Statute of Limitations for your province, debt collectors have the option of taking a legal stance against you in a court of law. If the collectors win the lawsuit, your wages may be garnished and you may be mandated for the sale of your assets.

Even if you are not taken to court, unpaid debts can drastically affect your credit score. Each time you fail to make a payment or are late making a payment, your credit score is afflicted. Missed payments can stay on your credit report for up to 7 years and may affect your ability to obtain loans.

If you are having difficulty making payments and are being harassed by debt collectors, speak with a financial representative today. There are options out there that can help you reach financial freedom.

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Kareena Maya

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.