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I understand that in Ontario, the SOL is 2 years except under certain circumstances such as when a home or realty is used as collateral. What about situations when an asset with a limited lifespan is used (e.g. a car or a piece of business equipment) as initial security for a loan, and a default only takes place after the asset has been written off.
For example, a car was used as initial security for a personal loan in 1998, it was subsequently scrapped 2006 (say), well passed its useful life, a default on payment of the loan occurs in 2007 and the creditor only takes legal action passed the 2 year period, say in 2011. Can SOL be used as defense against the claimant?

Thank you for your answer.

[JudyKayTee]

I understand that in Ontario, the SOL is 2 years except under certain circumstances such as when a home or realty is used as collateral. What about situations when an asset with a limited lifespan is used (e.g. a car or a piece of business equipment) as initial security for a loan, and a default only takes place after the asset has been written off.
For example, a car was used as initial security for a personal loan in 1998, it was subsequently scrapped 2006 (say), well passed its useful life, a default on payment of the loan occurs in 2007 and the creditor only takes legal action passed the 2 year period, say in 2011. Can SOL be used as defense against the claimant?

Thank you for your answer.

In this scenario how was the car disposed of when it was collateral on a loan? This was allowed by the note?

Instead of "let's say" could you post the actual circumstances. Researching on a "what if" helps nobody.