What is the Statute of Limitations on Debt in BC?
Debt is a dirty word, and too often seems impossible to shake.
So much so that as many as two in five Canadians believe they’ll never be free.
Worse, an average 67% of those believe that everyone else is in the same boat.
For obvious reasons, this can lead to a general belief that creditors hold all the cards once you sign on that dotted line.
In reality, though, you have far more rights than you might imagine.
One statute making sure that this is the case is BC’s statute of limitations on debt.
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What is the BC statute of limitations?
Designed to help residents in British Columbia, the ‘Limitation Act’ sets out precise details for caps on the periods during which creditors can sue in pursuit of outstanding payments.
Similar statutes exist across Canada and can range up to six years, but, in BC, limitations come into play just two years after:
- A debt was incurred;
- You made your last payment;
- Your last provable acknowledgment of the debt.
After that period, it becomes legally implausible for a creditor to pursue you legally.
This applies in the case of third-party collectors, bailiffs, and debt repayment agencies, among others.
That makes a huge difference, not only to the length of your debt but also to the ways creditors and collectors are able to communicate.
Understanding exceptions to the statute
Of course, there are some exceptions to this rule.
Most notably, you can expect an extension on those two years if:
- You make any further payments;
- You communicate with creditors in any way (including email);
- There is a written confirmation of liability.
These will each reset that limitation period, meaning you’re liable for debt for at least a further two years.
And, the exceptions don’t end there.
As well as the statute being dependent on your British Columbia base, certain debts are also exempt, including:
- Civil claims enforcing monetary judgment;
- Arrears of spousal support;
- Debts owed to government bodies;
- Legal claims such as damages, etc.
Are creditors acting in keeping?
Ultimately, this statute of limitations is in place to save you from ongoing creditor harassment and continued contact.
Effective April 2016, creditors must act in keeping with BC’s debt collection law even within this two-year limitation period.
In other words, while they are allowed to contact you, they must also:
- Send you written notice before a call;
- Call you between the hours of 7 am and 9 pm;
- Cover all contact costs;
- Avoid exerting undue pressure regarding payments.
After the two-year limitation period, these restrictions become even more stringent, with creditors no longer able to take legal action, or continue harassing you in any way to enforce payments.
What’s more, if you deem that creditors are breaching any of the above rules, the statute may come to your rescue even sooner.
The statute of limitations and your debt clearance
So, what exactly does the BC statute of limitations on debt mean for your debt problems?
The main thing to note here is that this is no easy credit fix.
In fact, even outside of limitation periods, unpaid debts will still impact your credit score and will continue to do so for upwards of seven years.
That said, there are circumstances where the statute can help you to find a way out of debt.
While it can be challenging to do so, those without assets or income could, viably, choose to wait out their limitation periods.
Admittedly, creditors will go above and beyond to avoid this, though remembering your rights as listed above can help with that.
Still, anyone attempting to wait out limitation periods alone is guaranteed to face stress and setbacks.
Bring a licensed trustee on board
That’s why it’s always worth bringing a professional trustee on board.
With experience in cases just like these and a comprehensive understanding of the law, such individuals can help you to succeed in your quest.
For instance, the moment you contact one of Bankruptcy Canada’s experienced trustees, they’ll provide you with a free no-obligation phone call, during which they’ll offer advice and outline precisely what they can do for you.
Depending on your situation, they can then work to oversee creditor communications, and ensure that your two-year limitation period stands up in BC law to clear your name at last.