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Ontario Statute of Limitations
Asked Aug 27, 2008, 02:22 PM
This claim is in ONTARIO, CANADA
A company made an unauthorized charge my credit card for $4791.38 around June, 2001. We made the last payment to the credit card company to pay for the other purchases (less the amount the company charged, which we disputed) within 30 days.
The Credit card company had advised us that they would not reverse the charge, and we refused to pay for it.
We received a letter from a collection agency which appeared to be owned by the credit card company (I think) on Dec. 12, 2001 stating that the account was past due and has been listed with their collection agency, requesting that we pay $5,170.03.
My understanding is that the Ontario Statue of Limitations limits collecting debts before 2004 to 6 years. Would the 6 years start on the date that I received the letter from credit card company's collections agency?
We were served with a claim from another collections agency a few months ago. Their claim states that the debt was charged off "on or about April 3, 2003" with a balance of "$5316.05", and that they had purchased this accounts receivable from the credit card company on or before Nov. 13, 2007. Am I correct in understanding that the debt was recognized on the last date that a payment was made to the credit card company (around May 2001), and therefore the statue of limitations 6 year time limit would have started on this date, or at latest on the date of the first letter from the collections company which is dated Dec. 12, 2001 (assuming not a penny was paid after that date)? Would that make the claim brought by this other collections agency company , who bought the debt from the credit card company in 2007, past the 6 year time limit?
Thank you for your help!
Last edited by jajaja; Aug 27, 2008 at 02:36 PM.
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Aug 28, 2008, 01:44 AM
Originally Posted by jajaja
Not a legal professional: The statute of Limitations laws for the Provinces and Federal Government in Canada
Ontario - The Ontario Limitation Act 2002 , came into force on January 1, 2004. It sets two years as the term (Section 4). This limitation will be reinstated where the debtor acknowledges the debt or makes a partial payment towards repayment of his debt. If the default occurred prior to January 1, 2004, the creditor will continue to have 6 years to pursue the claim. However, if the default occurred after January 1, 2004 then the 2-year rule applies.
What constitutes legal acknowledgement of a debt? It goes from last payment, because that is the date the credit card company recorded the activity.
You cannot start the Statute of Limitations clock ticking again if you do not acknowledge liability in writing, or by making a payment, BEFORE the end of the original 6 year limitation (or, on a debt incurred after 2004, the original 2 year limitation). If you made a payment toward the debt or wrote a signed letter to the creditor admitting, "Yes, I owe the money" BEFORE the six year period was up, then the six-year clock is effectively set back to day one and begins ticking off a new six-year limit from that day forward, during which time the creditor can sue for the money. This means it started from the date of your last payment.
I found this answer on Candian-Money-Advisior.ca on the Internet
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Aug 28, 2008, 09:00 AM
That's what I thought.. and my paralegal wrote a letter to the collections company stating that, with quotes from the Statute etc.
The collections company came back and said that the judge precluded it in the pre-trial which I could not remember...
Why wouldn't the collections company drop the claim if that were the case?
Isn't the judge supposed to throw the claim away as soon as seeing that the last payment was over 6 years before the claim (in my case 8 years).. we didn't make ANY payments, or claims that we owe the debt within the 6 year period... never. Or are we required to bring that matter to the judge's attention?
Further opinions would be greatly appreciated.
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Sep 26, 2008, 09:00 PM
First, the Limitations Act 2002 has a basic two year limitation period and the effective date of the legislation was January 1, 2004. Any debt with a last payment or written acknowledgment prior to this date would have a 6 year limitation period.
The first day of the 6 year period is the first day that the original credit card company determined you to be in default. That is the first day they could sue you for non payment of the debt. If your account were up to date on your last payment, default would arise on the next payment due date. If the account were still in arrears on the date of last payment, the account remained in default and the limitation starting period was the last payment date. If the debtor wrote to the creditor stating that they owed the money, the starting date for the limitation date would be 5 days form the date of mailing.
The issue that a debt is statute barred is a matter for a trial judge to determine based on the evidence presented. The pretrial - settlement conference judge does not have the authority to make this ruling that the account is statute barred.
Factoring companies buy bad debts and statute barred accounts for pennies on the dollar. They then attempt to induce by "hook or crook" the debtor to reaffirm the account either by making a payment or otherwise. Once they do the limitation clock starts again.
It costs $75.00 to $135.00 to commence a claim. This is a small gamble against a large balance. When you consider that over 70% of people sued do not defend, suing you may be a good investment.
When a factoring company buys accounts in bulk, the seller does not provide them with copies of the credit card agreement. The factoring company relies on third party information in most instances when they sue such as a credit bureau report or a bulk sale document.
A trial on the merits the alleged debtor or their representative in cross examination of the factoring company should ask for proof that the debtor actually owes the money. Such proof would be a credit card statement, the credit card application or some other document from the credit card company proving you are the "jane doe" on the credit card. In over 90% of these bulk sales, a condition is that the credit card company is not required under any circumstances to provide actual documentation. If the credit card company produces a credit bureau report, this is unreliable third party evidence not direct evidence.
As a pretrial issue, address the limitations issue. Have a copy of the old act setting out the six year limitation period. Have some case law on point that supports the six year period. Have a copy of the credit card agreement or summons a representative of the credit card company to appear. If you summons someone from the credit card company to give evidence on what constitutes default, they are likely to contact the factoring company and pressure them to drop the case as they are not supposed to be involved. If the witness shows, all you ask is when was the card in default. They will say on the due date when the payment was not made which was more than 6 years ago making the debt statute barred.
In your question, you indicated that your paralegal contacted the company and acknowledged you were the party in question and that you owed the money but they were statute barred from going after you. This is a common mistake. When I write to the factoring company, I make the following statement: I have been retained by Mr. Smith and Mrs. Smith with respect to a claim that they are indebted to ABD credit card. Please be advised in the absence of any evidence to the contrary they are not the party mentioned in this letter.
I wish to point out, if they were the party mentioned in the letter or I represented a party under these circumstances, that your
Evidence does not indicate that the alleged debt is not subject to a 2 or six year limitation period at set out in the Limitations Act in effect at the date of default, last payment or written acknowledgment.
If you have proof in the form of some document bearing my client's signature, please provide same so I convince them that they are party in question.
Should you chose to proceed with this action in the absence of proof from the credit card company, we will summons a representative of that company to produce some document bearing my/our signature and a credit card statement indicating the amount and date of the last payment or acknowledgment.
This usually scares them off. If it doesn't, the letter cannot be viewed in any way as an acknowledgment of the debt.
At the trial, they have the burden of proving that you are the debtor, that you owe this money and they are not barred from bringing the action. Make them meet the test.
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Jul 29, 2011, 11:19 AM
Comment on Iknowalotofstuff's post
Originally Posted by Iknowalotofstuff
I understand the limitation statute... however that does not prevent them from exercizing their right to set off. My question is can they attack a joint bank account and or a joint GIC in the same bank.
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Oct 17, 2013, 06:12 AM
If the debt is already Time Barred, then nothing you do including making a payment or acknowledging debt in writing will rest clock.
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