Understanding the Statute of Limitations in British Columbia
The concept of a statute of limitations is a legal principle that can be complex for many people to grasp. If you’ve ever asked, “Is There a Statute of Limitations in BC?” this piece will provide an in-depth analysis of the subject.
What Does the Statute of Limitations Mean?
The term statute of limitations refers to a fixed period within which legal proceedings must be initiated. After this duration has lapsed, the claim becomes unenforceable by law.
The British Columbia Limitations Act
In British Columbia, the Limitations Act governs the limitation periods for initiating legal action for various types of claims. This Act was revised in 2013, reducing the limitation period for debt claims from six to two years. This two-year limitation period begins from the date of the last payment or the last acknowledgment of the debt.
Statute-Barred Debts
When a debt has not been paid or acknowledged for two years or more, it becomes statute-barred. This means that the debt is uncollectible through the courts and any other collection methods, according to the Limitations Act.
Extending the Limitation Period
The Limitations Act allows for an extension of the limitation period under certain circumstances. If the debt is acknowledged within the two-year period, the limitation period restarts, allowing another two years for legal action.
Debt acknowledgment can occur in the following ways:
- A payment is made towards the debt, even if it’s partial.
- The debt is acknowledged in writing, either by hand or electronically.
- Email exchanges that contain sufficient information to identify the parties involved can also be considered an acknowledgment.
Handling Statute-Barred Debts
The Limitations Act prevents creditors from pursuing ‘non-judicial remedies’ to collect on a debt once the limitation period has expired. Despite this, some collection agents may continue to attempt collection through various methods.
However, making payments on a statute-barred debt will not restart the limitation period. Devoid of legal recourse, creditors may eventually stop attempting to collect on the debt.
Credit Rating Implications
Statute-barred debts can continue to appear on your credit report as bad debts for six to seven years from the date of the first missed payment. The repercussions of this can make obtaining credit in the future challenging and potentially expensive.
A Decade Long Limitation for Judgment Creditors
In cases where a creditor has successfully sued and obtained a judgment through the local court system, the limitation period for enforcing the judgment extends to ten years.
Government Debts and Limitations
Different limitations apply to the collection of income tax debts, student loans, and other government debts.
For personal income tax debts, the Federal limitation period is six years. However, the Canada Revenue Agency often sends out notices of income tax balances owing, which may restart the six-year limitation clock regularly.
Meanwhile, Business Goods and Services Tax or payroll source deduction debts have no limitation period and remain collectible until paid in full.
Canada Student Loan and Canada Apprentice Loan debts fall under the Federal six-year limitation period, while privately-funded student loan debts fall under British Columbia’s basic two-year limitation period.
Seeking Professional Advice
While the Limitations Act may seem like a viable strategy for dealing with your debt, it’s imperative to seek professional advice. Without the correct information, you could unintentionally reset the limitation period clock.
Professionals can provide information about the options available to help ease the burden of unmanageable debt. Consultations are typically free and confidential. Getting the information you need to make a decision is the first step towards gaining control of your future finances.
Conclusion
In conclusion, the answer to the question, “Is There a Statute of Limitations in BC?”, is yes. However, it’s crucial to understand the intricacies of the Limitations Act and seek professional advice when dealing with debts. This will ensure you make informed decisions and take the right steps towards financial freedom.
