[cissy1967]

Approx February 2005, at the time my husband and I had our own business it was incorporated. The company purchased supplies from a local company, we fell under financial difficulty and in the beginning of Jan 2006 we closed the business due to financial problems. I was just recently contacted in Jan 2007 from a collection agency that I personally owe this debt due to the fact I signed a personal guarantee from when we applied for an account there. This collection agency for the past weeks has been contacting me first at home then I called from work and they had call display, and now I receive up to 4 to 5 calls a week wondering when I am going to pay off this debt. My boss can here my conversations with them and is getting upset for me receiving personal calls. At first I was unaware of my rights but looking on the internet I am becoming more aware. Just to let you know that at first I said I did not owe this as we were incorporated and let them know that we are financially not able to pay a small amount at this time, she became very threatening with me stating that she is going to take me to court and garnish my wages. Also, I notified her that we are refinancing our home to pay off personal debts and that we do not have any other money extra once done. She called 4 times last week stating to me that I have no intention on paying this debt and is going to take me to court. I am unsure what to do at this point. I looked into the invoice and it was done in Feb 2005, and I made a payment in first part of June 2005. Can you give tell me if the SOL applies to me in this case?

[Lowtax4eva]

Was this amount not covered in the papers when the company went under? By making a payment I think you automatically admitted the debt was yours so your responsible for it, I'm not a lawyer though. But I can tell you that if you send them a registered letter telling them to deal with you only by mail they can't call anymore, your consumer protection agency can step in if they keep calling after this.

I would call a non-profit credit counselling service (check the yellow pages) and they may have more tips. Also statute of limitation for debts is something like 6 years, this is only 2 years old.

[Justice Matters]

First off, it is common for collection agencies to be aggressive in their communications since it is really the only tool they have to make people pay.

You indicate that you have been looking into your rights, and we assume you mean those with respect to collection agencies, and so we won't belabour the point too much here except to say that you should advise the collection agency by phone, fax and registered mail that you cannot take personal calls at work and if they continue to "harass" you in this manner you will file a complaint with the Ministry of Government Services.

With respect to Ontario's Limitations Act, a creditor generally has two years to commence legal action from when the debt occurred otherwise they lose the right to do so. There are some variations on this theme, however, which could mean that since a payment was last made in June 2005 they could have until May 2007 to commence legal proceedings.

Our advice is to lay low and wait and see if they actually bring a claim against you.

Incidentally, they can't garnish your wages or seize your property without first filing a claim against you and then winning it at trial (assuming a defence is filed on your behalf).

[ballengerb1]

You SOL starts on June 2005 since you made a payment on that date.

[Justice Matters]

With all due respect to ballengerb1, June 2005 is certainly a possible, even likely, start date for the basic limitation period but it is not necessarily the only one. Ontario's Limitations Act says the following:

Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered (emphasis ours)

A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

The earliest this claim could have been discovered was when the invoice was due - supposedly soon after it was issued. Therefore, a strict interpretation of the Act would mean the limitation period began to run from February 2005. However, and as we suggested in our previous post, there is some flexibility on this issue and ultimately it would be up to a judge to decide based on arguments made by each party.

In any event, if you can't afford payments right now, our advice remains the same.

[ballengerb1]

I appreciate the kindly worded statement of Justice Matters. He is a gentlman and my experience is limited to US law. In the US your SOL starts when the debtor lasts acknowleges his debt, in the case the last payment. Furthermore, if a debtor offers to pay full or settlement, or makes any payment, a new start date for the SOL begins.

[CaptainForest]

Wow, all this bickering over 1 month.

Justice, I have to go with ball on this one though, June 2007.

Not only is it when a claim is first discovered, but…

The company can argue that accepting a partial payment was acceptable to them and therefore agreed to the change in terms.

The question also becomes…the invoice was Feb 05.. when was the payment due though?


ANYWAYS………..CISSY…..


Take a look at the Ontario Ministry of Government Services website, specifically on Collection Agencies here:

Collection Agencies - Government of Ontario (Canada)

Scroll down on the main page to “If I feel I'm being treated unfairly by a collection agency, what can I do?”

Or you can click on <Collection Agencies Act> and read the act for yourself.

See The Consumer Protection Branch - Government of Ontario (Canada) on how to report them.

[ballengerb1]

Captain Forest, I think you made a key stroke error when you wrote 2007, I think you meant 2005. My original point is "when the debtor lasts acknowleges his debt" which was in June 2005 when a payment was made. In my locale the SOL would still be running since it is less than 2 years.

[CaptainForest]

I agree with you ball.

Yes, June 2005.