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I Have Not Heard From My Credit Card Companies In Years. Do I Still Owe That Money To Them?

Most debts in Ontario are subject to a two-year limit. This is known as the Statute of Limitations.  Basically, if any companies you owe money to have not reached out by letter, text message or telephone to demand a repayment of the debt within two years of the last payment you made on that account, you can possibly use the Statute of Limitations defense against any lawsuit started in court.  

A successful Statute of Limitations defense prevents any collection agency or lending organization from starting a garnishment of your wages (a method of ensuring repayment through your paycheque and employer, as ordered by the Court). Such a defence would also prevent any company you owe money to from placing a lien (a claim against your assets) on your property.   

In many cases, a company you owe money to can attempt to collect from you for a number of months and then either involve the services of a collection agency to go after you on their behalf, or sell the debt directly to a collection agency.  In the first scenario, it’s not unusual for multiple collection agencies to be hired to chase you down for any amounts owing, making the paper trail of contact records more difficult to track over time.  And if any company you owe money to cannot prove they were in touch with you directly (or through a collection agency) within the two year Statute of Limitations period, it is unlikely a judge will allow a garnishment of your wages, a bank account freeze or a lien on any assets you own.  If the collection agency can prove contact over the two-year period then a garnishment could be successfully registered against you in Court and an Order To Remit notice sent to your employer.  

Let’s assume the collection agencies failed to speak or contact you during that two-year period.  Are you off the hook for those debts owed?  Yes and no.  Your paycheque is safe from garnishment but your credit history with either Equifax or TransUnion (the two major credit bureaus operating in Canada) will typically retain a history of the amounts owing to any creditor  (and any attempts to collect) on for a period of six to seven years. In some cases, a company is allowed to keep an outstanding debt on your credit report for longer than that period of time.  That could hurt your chances of acquiring new credit over time.  

And that overly-aggressive collection agency who drives you up the wall? The one that calls you consistently at 8 AM every Sunday and 9 PM on weeknights?  They can legally continue to call, text and write to you as long as they continue to make attempts to collect on any debts owed.  

So how do you make the debt go away forever? One way to deal with the debt, avoid bankruptcy, keep your assets safe and have irritating calls and letters from those collection agencies stop is to consider a Farber Consumer Proposal.  Administered by our Licensed Insolvency Trustees, a Farber Proposal can reduce the amount of debt you will need to repay, set you up with one convenient monthly payment over a multi-year period and help put an end to your debt and those collection calls – forever.