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Sallybear · Sep 21, 2007, 08:53 AM

Hello,

I am in Ontario Canada. I recently received a letter from a first party debt collection agency telling me that they had purchased my account from a Bank and that they were now the owners of said account.

Bottom line on this is that the debt they are claiming is min, is NOT mine. I have a joint line of credit (that belonged to my husband before I came into the picture) with that particular institution with a $0 balance but that is all. I have never had a loan, credit card or even a bank account with that Bank.

I have called both the bank and the collection agency and they have at least told me that they will look into my claim that this is false (I'm not holding out a lot of hope though based on conversations so far). They claim this is a defaulted loan from 1997.

What I want to know, is if this is even within the ON law statue of limitations for them to try to collect this?? It was 10 years ago for heavens sake!

I have a letter drafted up to send to them disupting this debt, but if it is out of the statue of limitations I would like to be able to mention this in the letter as well.

Thanks in advance to anyone who can help!

ScottGem · Sep 21, 2007, 08:58 AM

First, you seem to misunderstand what the Statute of limitations means. It is a common misconception. The SOL prevents a collector from using the court system to recover a debt one the SOL has passed. So they can't sue you. But a debt NEVER expires. A debt is a promise to pay. Until the debt is paid, then the owner of that debt can dun you for payment.

So you need to have them provide you with verification that the debt is yours. If they can't then tell them to go suck wind.

Iknowalotofstuff · Sep 21, 2007, 10:27 AM

Originally Posted by Sallybear

Hello,

I am in Ontario Canada. I recently received a letter from a first party debt collection agency telling me that they had purchased my account from a Bank and that they were now the owners of said account.

Bottom line on this is that the debt they are claiming is min, is NOT mine. I have a joint line of credit (that belonged to my husband before I came into the picture) with that particular institution with a $0 balance but that is all. I have never had a loan, credit card or even a bank account with that Bank.

I have called both the bank and the collection agency and they have at least told me that they will look into my claim that this is false (I'm not holding out a lot of hope though based on conversations so far). They claim this is a defaulted loan from 1997.

What I want to know, is if this is even within the ON law statue of limitations for them to try to collect this??? It was 10 years ago for heavens sake!

I have a letter drafted up to send to them disupting this debt, but if it is out of the statue of limitations I would like to be able to mention this in the letter as well.

Thanks in advance to anyone who can help!

ScottGem is absolutely correct. The SOL does not cancel the contract under which the debt arises. It simply remover the court as an avenue to recover the money. The burden of proof in a civil providing rests entirely with the plaintiff... the person making the claim. In the absence of this proof, a Court will not find for the plaintiff.

Do not have any money on deposit at this bank as the right of offset still remains as a remedy for the alleged creditor. Do not pay anything. Do not write to them. Usw only the phone.

Your response to the collection agency should be:
" I do not and never have had a debt with (creditor)"
" Provide me with Proof of Indebtedness which should include something signed by me"
" I will not speak with you further in the absence of this information. Goodbye"

Each successive call should be a repetition of these three lines. Then hang up. Keep a log of their calls (time / date) and the content of the call. This will be helpful if you wish to file a complaint

Collection agencies work using reverse onus. They want you to prove you do not owe the money rather than them having to prove you do. This is a lot less work for them. When they get only three lines from you and sound of the receiver hitting the cradle, they will get the point and do their job.

Do a Credit Bureau check at Equifax and Trans Union to make sure you are not the victim of indentity theft

Lowtax4eva · Sep 21, 2007, 10:33 AM

I was going to say do send a letter, send it registered so you can prove they received it.

I just had the same thing happen to me. I live in Quebec. A collection agency kept sending me letters so I sent them a registered letter back asking them to prove the debt (copy of a contract I signed with Telus (phone bill)) and they never replied. Finally after they sent me more letters I sent a second registered letter making an official complaint with a cc to the Quebec consumer protection office and guess what. The very next day they closed the file and called to apologize since they couldn't prove the debt was mine.

ScottGem · Sep 21, 2007, 10:38 AM

I have to disagree with using only the phone to contact. You need to put it in writing that you dispute the validity of the debt and that you have requested verification. You also inform the creditor that they should only contact you by mail (I think Canada has laws similar to the US on that). Also that the only contact they should have from this point is to send verification of the debt.

Lowtax4eva · Sep 21, 2007, 10:43 AM

Indeed Scottgem, it's the same, you are allowed to request only to be contacted by mail and that all debt collection stop until they prove the debt.

Sallybear · Sep 21, 2007, 12:14 PM

Thanks everyone, this is really helpful.
I will stay away from even mentioning the SOL to them. As I mentioned already, it isn't my debt.
If I they come back to me and say the debt is mine, I will request proof - in the form of a signed contract.
I already have a letter drafted disputing the debt, but I will make some adjustments based on the advice above.
Thanks again,

Iknowalotofstuff · Sep 21, 2007, 02:11 PM

There is a reason for not sending a letter. A letter even if it clearly disputes the debt is also an admission of its existence. You do not want your letter to be the instrument of your having to pay. When you state categorically that a debt is statute barred and take no other action, the creditors only alternative is to take legal action which if they have half a brain they won.t commence as they have no evidence of contact over the past 2 or 6 years. Do not give them that evidence. Judges are human and often conservative, In a court of equity such a SCC, they will take every chance to say that a debt is not statute barred. A Letter from the debtor even if it disputes a debt as statute barred can still be viewed by some as an acknowledgment of the debt. I have seen it happen. If a letter needs to be sent, send it via a third party in the absence of a Letter of Authorization. This affirmative statement can outline the argument but give no acknowledgment.

With all due respect, I use this approach with clients as a result of the wording of argument definitions in certain contracts or legislation. For example, the Canada Student Loan Act provides for a limitation period of 6 years after which a student loan debtor cannot be sued. But it also defines acknowledgment of the debt as a letter disputing the debt under a limitation argument. If no letter was sent and the argument made orally, there would be no chance for the agrement to be misconstrued. It is safer to err in the side caution that to yell to loudly about an argument under the SOL. Do not give ammunition.

ScottGem · Sep 21, 2007, 04:50 PM

Originally Posted by Iknowalotofstuff

There is a reason for not sending a letter. A letter even if it clearly disputes the debt is also an admission of its existence. .

I would have to see some statute or case law that supports that. I cannot see how a letter that states that they deny or even have no knowledge of the debt can be construed to be an admission.

Iknowalotofstuff · Sep 21, 2007, 07:57 PM

The following supports my earlier comments. I have copied below s. 19 of the Canada Student Loans Act. If you read s. 19 4(b), a letter send saying that you don't owe the money can be implied as an acknowledgment of the debt even though it contains a claim that the debt is statute barred. If this type of logic is used by a creditor in other cases, it might be more effective not to send a letter as the inferences that may be drawn may not be the intention of the writer. Err on the side of caution. For example, if I write to the student loan creditor and say... "I had a student loan with you that I have not paid in six years. I believe the debt is statute barred and I do not intend to pay in the absence of a court order." This is an admission that I owe the money but I don't intend or have to pay because six years has elapsed. That type of letter is an acknowledgment sufficient to come within the meaning of s. 194(b).
Canada Student Loans Act.
GENERAL
Limitation period
19.1 (1) Subject to this section and section 19.2, no action or proceedings shall be taken to recover money owing under a guaranteed student loan more than six years after the day on which the money becomes due and payable.

Deduction and set-off
(2) Money owing under a guaranteed student loan may be recovered at any time by way of deduction from or set-off against any sum of money that may be due or payable by Her Majesty in right of Canada to the borrower or the estate or succession of the borrower.

Acknowledgment of liability
(3) If a borrower's liability for money owing under a guaranteed student loan is acknowledged in accordance with subsection (4), the time during which the limitation period has run before the acknowledgment does not count in the calculation of that period.

Types of acknowledgments
(4) An acknowledgment of liability means

(a) a written promise to pay the money owing, signed by the borrower or his or her agent or other representative;

(b) a written acknowledgment of the money owing, signed by the borrower or his or her agent or other representative, whether a promise to pay can be implied from it and whether it contains a refusal to pay;

(c) a part payment by the borrower or his or her agent or other representative of any money owing; or

(d) any acknowledgment of the money owing made by the borrower, his or her agent or other representative or the trustee or administrator in the course of proceedings under the Bankruptcy and Insolvency Act or any other legislation dealing with the payment of debts.

Acknowledgment after expiry of limitation period
(5) If a borrower's liability for money owing under a guaranteed student loan is acknowledged in accordance with subsection (4) after the expiry of the limitation period in respect of the loan, an action or proceedings to recover the money may, subject to subsections (3) and (6), be brought within six years after the date of the acknowledgment.

Limitation period suspended
(6) The running of a limitation period in respect of a guaranteed student loan is suspended during any period in which it is prohibited to commence or continue an action or other proceedings against the borrower to recover money owing under the loan.

Enforcement proceedings
(7) This section does not apply in respect of an action or proceedings relating to the execution, renewal or enforcement of a judgment.

2003, c. 15, s. 13.

ScottGem · Sep 21, 2007, 09:01 PM

Sorry but that doesn't support your contention. The key here is in the phrase: "don't owe the money". This is borne out by the example: "For example, if I write to the student loan creditor and say ... "I had a student loan with you that I have not paid in six years. I believe the debt is statute barred and I do not intend to pay in the absence of a court order.""

In the text and the example shown, the alleged debtor is not denying the debt, just their obligation to pay. In such a case, then I would agree, since the obligation to pay a debt always exists.

However, in the situation we are talking about, the alleged debtor is not acknowledging the debt at all. In fact, they are specifically saying that they don't believe the debt is theirs and that the creditor must offer proof that it is before they will acknowledge it.

A person cannot be found to have acknowledged something when they deny it. That makes absolutely no sense.