[kolobok]

Hi,

Apologies if I am repeating some previous questions, I just want to get a confirmation that my understanding of the matter is correct.

Let's say X defaulted on credit cards and student loans (OSAP), and having read equifax notes did not make any payments so that the last activity would not get offset.

I also saw somewhere in this forum that debt actual expires after a number of years (could someone please advise what is the statue regarding this expiration, if it was made before 2003?).

Is this then correct to assume that if in 2008 it will be 6 years since date of last activity and all items on the credit file, it should become clean and nothing will remain on file?

Also, is this then correct to assume that after that period (6 yrs) has passed, the collections have no legal ground to come after you?

Forgot to mention that this is Ontario, Canada.

Appreciate your response.
Thanks,
Anna

[Justice Matters]

In Ontario, the limitation period for filing a lawsuit is six years for debts arising before January 1, 2004 and two years for debts arising thereafter.

At some point in time any record of these debts will also have to be expunged from your personal credit record (someone else will need to post how long you need to wait).

Neither of the above events actually eliminates the debt and a creditor could, for example, forever deny you credit again until and unless the past debts were paid.

[Matt3046]

Well in the US student loans will not ever be taken off, since they are guaranteed by the government they do not have a statue (or is it statute) of limitation.

[Fr_Chuck]

Yes, you are going to be stuck with the student loans, you may want to see about a refinance on them, there are some very good rates on them right now.

[ScottGem]

A debt is a contract. You contracted with a lender to provide you money that you promised to pay back. The only time that contract is done is when its been paid back. That has always been made clear here so I'm not sure where you ever got that idea.

What can expire is a creditor's right to sue you in a court of law over the breach of contract. Also, most credit card entries are purged after 7 years. But neither of the above prevents the creditor from continue to attempt to collect the debt.

[kolobok]

OK, but if in fact the debt was sold to collections or written off, the original creditor does not consider the debtor as owing anything, is this not correct?
Also, the banks also have to obey the information keeping legislation according to which there is a specified number of years that they can keep information on you, after which it has to be purged, correct?
In which case, after the 6 years have passed and the right to sue has also expired, the only thing you can be afraid of is harassment from the collection agencies.
I am more interested to know on OSAP and that's because I did find an article before whereby it says that a law was passed under which even government guaranteed loans now have to follow the general credit legislation and expire after 6 years.
I am wondering if someone can confirm this from Canadian law perspective.
Is there something that I am missing or not knowing?

Appreciate any response.

[ScottGem]

OK, but if in fact the debt was sold to collections or written off, the original creditor does not consider the debtor as owing anything, is this not correct?

No that's not correct. If the debt was only written off, its still owed, the creditor has just taken a loss against taxes. So anything they collect is all income. If they sold they debt, its still owed, just not to them.

Also, the banks also have to obey the information keeping legislation according to which there is a specified number of years that they can keep information on you, after which it has to be purged, correct?

Again, incorrect. The creditor can maintain info about you and the debt as long as they want to. Its only the credit bureaus that have to purge the info after time.

In which case, after the 6 years have passed and the right to sue has also expired, the only thing you can be afraid of is harassment from the collection agencies.

Dunning is not always harassment.

I am more interested to know on OSAP and that's because I did find an article before whereby it says that a law was passed under which even government guaranteed loans now have to follow the general credit legislation and expire after 6 years.
I am wondering if someone can confirm this from Canadian law perspective.
Is there something that I am missing or not knowing?

Appreciate any response.

Again, a loan never expires. The only thing that expires is the right to sue to collect the debt.

[kolobok]

And you are sure this is applicable 100% to Canada?

What happens if for example, after the credit file purged the information and is clean, and then you decide to payoff the debts? Does that automatically offset the 6 years clock and information reappears in your credit file?

Also, let's say the credit file has purged and you decide to apply for mortgage with a bank you didn't have history with, is there a problem there?

After the 6 years have passed and the right to sue also obviously, if now the person gets some property e.g.. Car, house, whatever, is there any way this can be seized from them?

Thanks,
AnnaJ

[ScottGem]

I'm about 90% sure that a debt never expires anywhere in the world. I know its true for the US.

Credit files are generally purged after 7 years. The 6 year time frame is a SOL for how long one can be sued.

If a person reactivates the data by making payments against it, they could be restarting the clock.

If the credit file has been purged, then the mortgage lender is not likely to find it.

To seize assets a judgement has to be obtained. If a judgement was never obtained then assets can't be seized. However, if a judgement WAS obtained it will generally last for 10 years and is renewable for at least another 10.

[kolobok]

What if the person has no assets, what can in fact be seized from him?
I checked again on Equifax.ca website where they say that all defaults/bankrupcies and bad credit records will be purged after 6 years.
There is no indication of 7 years though.
Should I give them a call to make sure this is correct?

[ScottGem]

Maybe in Canada it is 6 years. One year isn't going to make much of a difference.