What Debt Help Resources Are Available to Me?
We live in a world where financial challenges are commonplace, and dealing with debt has become an essential survival skill. As Licensed Insolvency Trustees, we are equipped with the legal authority and expertise to help you navigate through your financial challenges. Our aim is to educate and guide consumers who are grappling with debt, helping them to understand and utilize the resources available to them.
1. Time Limit on Debt
It’s not unusual for individuals to grapple with ancient debts that seem impossible to clear. What many are unaware of is the existence of a Statute of Limitations on Debt.
In British Columbia, the Limitation Act defines a period during which legal action can be taken against you for a debt.
This limitation period is:
A two-year period starting from:
- The day the unsecured debt was incurred;
- The date of the last payment made; or
- The date of the last written acknowledgment of the debt by the debtor.
If two years have passed since any of the above events, the creditor cannot legally compel you to pay. However, certain actions can restart this two-year period.
Even small or ‘good faith’ payments can reset this period, so it’s crucial to be aware of this.
Note: This limitation period doesn’t apply to all debts. For instance, you’re still liable for debts that you’ve been sued for, debts owed to government bodies, and arrears of child or spousal support.
2. Written Communication Request
If you’re waiting out the two-year Statute of Limitations period, or are inundated with calls from debt collectors, a Request for Communication in Writing Only can be a lifesaver.
Consumer protection laws in BC empower consumers to demand that creditors only contact them in writing.
A written notice is usually easier to handle than an aggressive and potentially threatening phone call.
You can make this request by:
- Writing to the collection agency;
- Sending your request via a method that provides proof of delivery;
- Retaining a copy of your request.
Warning: Don’t neglect your mail. The absence of phone calls doesn’t mean that creditors are taking no action.
3. Check Your Credit Report (for Free!)
While most people are aware of their payment habits, few regularly check their credit reports for accuracy.
Inaccuracies on your credit report can result from identity theft or clerical errors, and correcting these inaccuracies can take weeks or even months.
If you’re seeking financing, you may not have accounted for such delays.
You can request a comprehensive written credit report from each of the credit bureaus in Canada once a year.
The forms for this request can be found here:
Pro Tip: For immediate access to a list of your credit accounts, you can check your “Consumer Disclosure” online, and later request your full Credit History Report.
4. Government Debt Forgiveness
Contrary to popular belief, there are legal ways to write off government debts.
If you’re dealing with government debts such as income taxes, business GST, federal and provincial student loans, or even MSP and ICBC debts, there are two federally legislated debt solutions available:
A Consumer Proposal allows you to consolidate, reduce, and settle your debts for less than what you owe. Apart from personal bankruptcy, this is the only debt negotiation method that the government will accept.
Personal Bankruptcy:
If you’re unable to repay your debts in full, you can seek protection under personal bankruptcy legislation. No creditor or party can prevent you from doing this.
Caution: Only a Licensed Insolvency Trustee can assist you with these two debt management options.
