[moneytalks]

Hello, I've been reading up as much as I can on the subject of the Statute of Limitations on personal debt in Ontario and Quebec as I've found myself in an uncomfortable situation with a lot of debt - some recent, some old. Most is from Ontario where I currently reside, but some is from Quebec where I lived from 1999 to 2003. From 2004 to early 2006, I was making regular payments and even got a new credit card, a lease on a new car, etc. Things were going well.

But recently I got behind in payments and most of my debts were sent to collection agencies (except one Visa card and the car - neither of which has ever been late). I was trying my best to pay everything regularly, but in the last 6 to 12 months, things have really gone downhill for me and many new debts have just gone to collection agencies including some major credit cards, department store cards, tuition for college courses in Ontario, a debt to a lawn care company, a major credit card, and several other debts related to a small business I ran as a sole proprietor.

I can see more and more debts soon going to collection agencies as all I've been able to do now is get a part time job to pay my most urgent daily needs. There's no money to pay old bills. Not to be one to run away from responsibility, but some debts are getting really old and I haven't heard from many of them in a while. I don't answer my phone during the day now, but I know they call and mail me letters. Some debts are are about 6 to 7 years old, and from Quebec. Some are from Ontario from the mid 1990s and since 2004 when I returned to Ontario. According to what I have read, it looks like I may be off the hook for anything older than 2 years (which is about half the debts). Of course, Canada (and maybe Ontario) students loans are excluded. I've talked to some of them on the phone in last few months to let them know I wasn't able to pay anything (when they called me, but I've since stopped answering the phone during the day to avoid this as it's depressing and stressful).

Did I "reactivate" the SOL by speaking, hence "acknowledging" my debt when I was still answering the phone? Now that I have a job, albeit part time, I thought of going to debt counseling (and briefly considered bankruptcy) to help stop the phone calls. But, if some debts are past the SOL, and I'm struggling to pay anyway, I don't want to pay anything I'm legally not obliged to (unless I come into a lot of money soon, find a better job, or win the lottery). Some debts are few hundred dollars, some a few thousand each. In total, around $30,000.

This article was helpful, but still let me confused regarding the 2 year and 15 year SOL:

Banking Law Update

By talking on the phone, did I reactivate the SOL? When Eaton's went Bankrupt in 1999, I stupidly decided it wasn't necessary to pay my credit card, but in 2006, a collection agency called to collect on it on behalf of Wells Fargo that bought the debt. I made a few payments until I ran into a cashflow problem and haven't given them any money nor made contact with them in several months.

[excon]

Hello money:

DEBTS don't expire. The ability to sue does. The statute of limitations, however it's figured in your case, will only limit the time your creditors have to SUE you. If the statute has passed, they obviously can't sue, but they can hassle you about it forever.

excon

[ScottGem]

The SOL goes from date of last activity so making payments does restart it. Just having phone contact doesn't.

But, as excon pointed out, the SOL only deals with the creditor's right to sue. If they sue withinthe SOL and get a judgement, that judgement can last 10 or more years and is renewable.

[moneytalks]

Thanks, excon and ScottGem. I was surprised to learn that there actually was a SOL on debt in the first place. Perhaps for the smaller and long standing debts, the companies will simply write them off. That would take some of the pressure off right now.

As I was about to go to debt counseling, the counselor will probably phone up all of my creditors to set up a payment plan. My thought was, if some debts are so old that the companies are past their SOL and are about to, or already have, written them off as bad debt, I'd rather not pay that. With so little money at my disposal now, there's no sense paying off a long forgotten debt when that money could be better used for current living expenses and debts.

[ScottGem]

I was surprised to learn that there actually was a SOL on debt in the first place. Perhaps for the smaller and long standing debts, the companies will simply write them off. That would take some of the pressure off right now.

You aren't listening to us. There is NO SOL on debts. The ONLY thing the SOL covers is the ability to sue to recover the debt.

A write off means NOTHING to you. Its simply a way for the creditor to take a loss against income for a debt that is in delinquency. It has absolutely NO effect on your obligation to pay or their right to collect.

[excon]

Hello again, money:

If they've "written them off", that's only an accounting term. It has nothing to do with your liability. Depending on exactly HOW old the debts were, I'm absolutely certain that they've been sold to some bottom feeder who will contact you at the most inopportune time.

Therefore, you DO need to concern yourself with those debts too. Cause if you're going to do it all, you might as well clear the decks. The banks who sold them should know who they sold them to. You may have to pry it out of them.

Or your counselor will... However, your counselor isn't going to do anything other than what you could do for yourself, and you can do it better and cheaper. In fact, if you can come up with, say 25% of what you owed in cash, you could do miracles.

excon

[moneytalks]

You aren't listening to us. There is NO SOL on debts. The ONLY thing the SOL covers is the ability to sue to recover the debt.

A write off means NOTHING to you. Its simply a way for the creditor to take a loss against income for a debt that is in delinquency. It has absolutely NO effect on your obligation to pay or their right to collect.

Sorry about that. I was listening, I just got the terminology mixed up (not very up on these things). What I meant was that I was surprised there was a statute of limitations on the right for someone to sue or recover the debt.

[moneytalks]

Hello again, money:

If they've "written them off", that's only an accounting term. It has nothing to do with your liability. Depending on exactly HOW old the debts were, I'm absolutely certain that they've been sold to some bottom feeder who will contact you at the most inopportune time.

Therefore, you DO need to concern yourself with those debts too. Cause if you’re going to do it all, you might as well clear the decks. The banks who sold them should know who they sold them to. You may have to pry it out of them.

Or your counselor will.... However, your counselor isn't going to do anything other than what you could do for yourself, and you can do it better and cheaper. In fact, if you can come up with, say 25% of what you owed in cash, you could do miracles.

excon

Ah, I see. That sounds like what happened with the Eaton's credit card debt from 1999. I hadn't heard a word about that debt until last year. Looks like Wells Fargo bought a bunch of accounts and hired a collection agency to try to recover the debt - or at least some of it.

The debt counselor I'm going to see is at a non-profit place. They appreciate donations, but aren't necessary. Since I'm not exactly rolling in money, and all I can get is a part time job at this time, it would be great to settle up for 25% of the original value. But, even 25% of $30,000 is still $7500.

Is this all fairly common in most areas? Or are there any specifics for Ontario or Quebec? If anyone knows, please tell! :D