Is There A Statute Of Limitations On My Debt?

Is There A Statute Of Limitations On My Debt?

When it comes to dealing with debt, many people find themselves asking, “Is there a statute of limitations on my debt?” This question is not only crucial for understanding your financial obligations, but it can also provide some relief if you’ve been struggling with debt for a long time.

Exploring The Concept Of Statute Of Limitations

Statute of limitations refers to a law that sets the maximum time after an event within which legal proceedings may be initiated. When it comes to debt, this means that there is a specific time frame within which a creditor can legally seek a judgment or order against you for the debt that you owe.

The Limitations Act of Alberta is an example of such a law. According to this act, a creditor cannot seek a judgment or order against you unless they do so within a certain time frame. After this time frame has elapsed, you may argue that the debt is now statute-barred.


Note: Being statute-barred does not mean that creditors will stop trying to collect the debt. They may still call you or pass the debt to collection agencies. However, their ability to legally enforce the debt is restricted.


Keeping The Debt ‘Alive’

One complexity in determining if a limitation period has expired is the concept of keeping the debt ‘alive’. A creditor can do this by having you acknowledge the debt or make a partial payment towards it. This can reset the clock on the limitation period, making it difficult to determine if the debt is statute-barred.

Provincial Laws

Every province in Canada has its own provincial law regarding the statute of limitations. This means that the time frame within which a creditor can legally enforce a debt can vary from province to province.

The Canada Revenue Agency (CRA)

The CRA is also bound by these rules in collecting past income tax debt. Generally, there is a ten-year statute of limitations for the CRA to collect past income tax debts. However, this time frame can be affected by various factors, such as if you’ve transferred assets to another party.

Final Thoughts

Understanding the concept of a statute of limitations on debt can be a complex task, but it is crucial for managing your financial obligations. Remember, the limitation only applies with respect to getting a judgment. It does not stop the phone calls, the harassment, or the actions of credit collectors.

If you are struggling with unmanageable debt or relentless calls from creditors, it may be time to seek professional help. Contact a licensed insolvency trustee to explore your options and find a solution that works for you.

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