Is There a Statute of Limitations in Ontario When It Comes to My Debts?

Understanding the Statute of Limitations for Debts in Ontario

When you are dealing with debt, it’s crucial to be aware of the laws and regulations surrounding this issue. In Ontario, the province has its Statute of Limitations that governs the collection of debts. But what does this mean for you? Could there be a time limit on your debts? This article will shed light on these questions and more.

The Basics of Debt Collection in Ontario

In Ontario, if you find yourself unable to repay a debt, your creditor might assign the debt to a collection agency. These agencies serve as intermediaries between you and your creditors, aiming to recover the outstanding amount. Their strategies can range from regular phone calls to legal actions, such as freezing your bank account or initiating a wage garnishment.

However, Ontario has laws in place to regulate the activities of these agencies, ensuring that you are protected during this stressful period. These laws are encapsulated in the Ontario Collection and Debt Settlement Services Act.

Note: The laws mentioned are specific to collection agencies and do not apply to the internal collection department of your creditor.

The Initial Contact from Ontario Debt Collectors

Before a collection agency can start calling you, they are required to send you a notice of collection. This notice provides you with details about the debt, the creditor, and the collection agency. You have six days after receiving this notice to consider your options before the collection agency can start calling you.

The Dos and Don’ts for Collection Agencies in Ontario

The Collection and Debt Settlement Services Act outlines what collection agencies can and cannot do. For instance, they can make reasonable attempts to collect their debts and even pursue legal action if necessary. However, they cannot threaten legal action without prior authorization from the original creditor or share any Draft Statement of Claims that appear to be issued by the court.

Frequency of Contact from Debt Collectors

Ontario laws also regulate when and how often debt collectors can contact you. They can call you up to three times in a week without your prior consent and are allowed to call between 7 am to 9 pm from Monday to Saturday, and 1 pm to 5 pm on Sundays. They are not permitted to call on statutory holidays.

Understanding the Debt Statute of Limitations in Ontario

The debt Statute of Limitations is the legal time limit within which a collection agency can take legal action against you for an overdue debt. For standard unsecured debts like personal loans and credit card debts, the debt statute of limitations in Ontario is two years. However, this doesn’t mean that the debt disappears after two years. Debt collectors can still call you to try and get you to repay, but they can’t take legal action against you.

Secured Debts and the Statute of Limitations

Secured debts such as mortgages or car loans have different rules. If payments are not received, rights can be enforced at any time, and the limitation period for these according to the Income Tax Act is ten years.

How Long Can Debt Collectors Try to Collect in Ontario?

Although the debt Statute of Limitations Ontario gives a collection agency two years to take legal action against you for a particular debt, this does not mean they will stop trying to collect after two years. They can continue to contact you until the debt is paid. However, many debt collectors will likely stop calling when they can no longer threaten you with legal action.

Dealing with Debt Collectors

There are multiple ways to handle debt collectors. You could make your payments if you have the means, negotiate with the debt collectors yourself, choose not to pay your debt, or speak to a Licensed Insolvency Trustee.

Conclusion

Dealing with debts can be challenging, but understanding the laws surrounding debt collection can make the process more manageable. Remember that you have rights, and there are professionals available to help you navigate the process.

If you’re dealing with overwhelming debt and wondering, “Is There a Statute of Limitations in Ontario When It Comes to My Debts?” know that you’re not alone. There are resources available to help you understand your rights and options.

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