Is There A Statute Of Limitations On My Debt?

In Alberta, the answer to this question would be yes.

The Limitations Act of Alberta states that a creditor cannot seek a judgment or order against you unless they do so within:

• 2 years after they first knew or ought to have known about the damage, injury or debt; or,
• 10 years after the claim arose (whichever expires first).

This means that if you have a debt out there and your creditor takes no steps to seek judgment within two years, there may be an argument that the debt is now statute-barred. Generally though, the creditor has likely made some type of step towards collecting. Even though they may not be able to get a judgment against you, that doesn’t mean they’ll stop calling you or sending collection agencies your way. Those actions are not statute-barred.

Another problem in determining if a limitation period has expired in Alberta is that a creditor can keep their debt ‘alive’ by having you acknowledge the debt or make a partial payment towards it. It quickly becomes tricky to determine if you have acknowledged the debt.

Beyond that, every province in Canada has its own provincial law regarding a Statute of Limitations.

Canada Revenue Agency (CRA) is also bound by these rules in collecting past income tax debt.  Generally, there is a ten-year statute of limitations for CRA to collect past income tax debts. There may be some intervening factors that could affect this timeframe, such as if you’ve transferred assets to another party. But ten years is a solid general guideline.

While this blog is not official legal advice, hopefully it can give you some guidance in determining if you have an argument to make with respect to the collection actions of one or more of your creditors. Keep in mind that the limitations only apply with respect to getting a judgment. It doesn’t stop the phone calls, the harassment or the actions of credit collectors. If you know your debt is unmanageable or the calls won’t stop, contact MNP Ltd. to see what options may be available to you.