In British Columbia, the Limitation Act sets various limitation periods, including a statute of limitations capping the length of time creditors have to sue a person for a debt owing. With regards to consumer debt, BC has a two-year basic liability limitation period, which is two years after:
The date an unsecured debt was incurred;
The date the last payment was made against it; or
The last written acknowledgment of the debt by the debtor (person who owes the money).
What this means is that your creditors cannot take legal action against you (ie. sue you) if it has been two years or more since you incurred the debt, made a payment on the debt, or gave a written acknowledgement (including emails) of the debt. It is important to note that there are exceptions to the two-year limitation period, and this period can be reset by certain actions.
You can learn more about BC’s Statute of Limitations on Debt by reading the overview here.
Although the statute of limitations on debt prevents your creditors from being able to sue or take other legal action against you to try to get you to pay off the debt, it does not prevent creditors from calling you, sending you correspondence, or negatively impacting your credit score by making notations about the outstanding debt on your credit history.
Many people who have old debts that are technically “statute barred” decide to write-off their debts officially by making a Consumer Proposal or filing a personal bankruptcy. This ensures a ‘clean slate’ and that credit history can start fresh, without debt!
Book your free debt consultation with Sands & Associates today to find out more about relying on the Statute of Limitations as a means to solving your debt problem, and other legal options to write-off debt.