What allows the statute of limitations on debt collection to be reset?
asked November 22, 2017 by Anonymous
A friend was recently contacted by a collection agency regarding an old credit card debt from over 4 years ago. The collection agent they spoke with mentioned “the statute” casually during the conversation, but did not elaborate.
We’ve done some research, and learned that the statute of limitations for legal action on a debt if you reside in Ontario is 2 years. We’ve also seen some references to situations that would reset the statute. My friend has not provided anything to them in writing, only spoken with them on the phone. She made tentative plans to pay a settlement amount with them, and they have sent a written confirmation of their offer, however she has not submitted the payment yet, and based on our research, it becomes unclear whether the conversations she had would trigger the statute to reset for this debt, as the calls were “recorded for training and quality purposes.”
Can you please to clarify whether their interaction thus far would reset the statute?
The statute of limitation starts from the last time your friend made a payment to the creditor. If that limit is up they can no longer chase you in court for the payment. But, your friend should know the credit reporting agency will have a record of non-payment and this will have a severe and damaging effect on her credit report, making it harder for her to get a loan.
answered 1 year ago by Debt.ca Staff