It goes from date of last payment, because that's the date that the credit card company recorded the last activity.

Important question.

If i opened a credit card account in 2002, but the last payment was 2005 for example, would the SOL be up in 2 years or 6 years?

Important question.

If i opened a credit card account in 2002, but the last payment was 2005 for example, would the SOL be up in 2 years or 6 years?

Talk to John Leblanc about acknowledgements over at the Canadian Financial Wellness Group. I'm not sure who else is in "the Group" besides him. Do you guys know each other?

As for not paying a debt after it's past its SOL: I don't want to be misunderstood. We've beeen talking strictly about legalities. More importantly, there are also moral considerations. I never bring them up because they are outside the scope of the forum; but that doesn't mean we should pretend they don't exist.

Ray

Hey Raymond,

I don't know what to say about your arguments at this point.. I'll have to study the statutes of limitations acts a little better.

If what you're saying is correct, it would change my opinions on things.

I do agree that at some points. ie.. After the credit item is off a credit report, or close to being off the credit report, don't pay the debt. I agree to not paying the debt after it's past the statutes of limitations.

I hadn't thought about how writing a letter would affect the statutes of limitations.

I'll keep this in mind until after I get back from holidays.

Interesting concept though.

This was even agreed to by a consumer protection agent who

Section 13(10): Subsections (1), (2), (3), (6) and (7) do not apply UNLESS THE ACKNOWLEDGEMENT IS IN WRITING AND SIGNED BY THE PERSON MAKING IT or the person’s agent. 2002, c. 24, Sched. B, s. 13 (10).
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I should have included Section 13(10) of the Ontario Limitations Act of 2002 that you referred to in your earlier post today.

Most of the other provinces have clauses in their Acts that have similar wording to Ontario's concerning acknowledgements. In fact, I think we got ours from Alberta or least adopted it in conformity to their version, which was enacted during March of 1999.

Forgetting all the legalese for the moment, it simply strains all credulity what pathological liars collectors are. Even in 2007, one hears supervisors from these companies aguing with a straight face, swearing up and down that no such Act exists inspite of there being 1.5 million links to it on Google.

For your son-in-law to even consider spending 2 seconds wasting his breath with them is absurd. Someone bought this debt up for, at most, .05 cents on the dollar [or 50 cents per 1000 dollars] as part of a portfolio and is simply working the phone list trolling for and bullying people into becoming suckers. Those who get sued over a debt, usually are, shortly after the default, not 10 years later.

Still, it's worthy to keep in mind collection agencies and debt buyers are always pulling the credit reports of people on their list and going over the Provincial Government's Personal Property Security (lien) Register in order to size up worthwhile targets to lean on.

In the U.S., legislation allows collectors to sue debtors after a limitation period has expired. For that reason, you will see a lot of American lawyers advising that the SOL period may only provide a defense for a debtor in the event that they are sued. Thus a lot of collectors in the U.S. buy up portfolios of old debt and and try to get default judgments on the percentage of people who don't defend against the action.

Although it has nothing to do with your case, it might be of interest to others that, in Ontario, there is no limitation period for OSAP loans. As well, the limitation period of the federal portion of a student loan is 6 years, while its eligibility for inclusion in bankruptcy is not until 10 years after ceasing to be a regular student.

Ray

hey folks...

it looks like the system is dropping userid's again...

if your post loses its user id... ie your username doesn't show up... just let me know in the contact page.

i'll check my emails daily.

Thank you, Raymond. I've read many of your posts and they are an excellent resource, but I must have missed that one to Angella.

To recap then, let's say an unsecured credit-card debt of $1000 went delinquent 10 years ago. The old Ontario statute applies, limiting the creditor's right to sue to six years. 2007 arrives, the bad debt is purchased by some bottom feeding collection agency, who calls the debtor, claiming he now owes $3000 (original amount plus interest).

The debtor is intimidated, admits that he owed $1000 ten years ago, but doesn't have the ability to pay back what they are claiming he now owes. The collection agency gives him a week to come up with a lump sum for the entire amount or work out a monthly payment schedule.

Debtor talks to mother-in-law (cest moi) and she reads up on this stuff. When the collection agency calls back ready to slurp up some quick profits, they'll be miffed because the debtor will deny their claim under the Statute of Limitations.

It will be interesting to see how much further these parasites will go.

Your point about the Restricted application Section 13(9) is a great one, worthy of repeating until it becomes common knowledge. It makes eminent sense. You cannot start the SOL clock ticking again if you do not acknowledge liability in writing, or by making a payment, BEFORE the end of the original 6 year limitation (or, on a debt incurred after 2004, the original 2 year limitation).

If you made a payment toward the debt or wrote a signed letter to the creditor admitting, "Yes, I owe the money" BEFORE the six year period was up, then the six-year clock is effectively set back to day one and begins ticking off a new six-year limit from that day forward, during which time the creditor can sue for the money. However, as you pointed out, there is an ultimate 15 year limitation on the debt, so it cannot be extended beyond 15 years from the original date of delinquency.

If you made a payment toward the debt or unwisely wrote a signed letter to the creditor admitting "Yes, I owe the money" AFTER the statute of limitations was already effective, then your letter or payment does NOT have the effect of restarting the clock or again making the debt actionable in court.

That said, I think you are very wise to advise people to stick to the phone.

Yes it is: here's a reprint of my June 25, 2007 response on this point to Angella. Collectors like Deanna Natale, iQor, Inc formerly CBCL - Canadian Bonded Credit Limited - Now Iqor Collection Agency , CBV, ARO pick up the old stuff and work the numbers by bluffing people in the hopes a few suckers will bite. And they do.

Again, student loans are different.

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Section 13(8): Subject to subsections (9) and (10), this section applies to an acknowledgment of liability in respect of a claim for payment of a liquidated sum even though the person making the acknowledgment refuses or does not promise to pay the sum or the balance of the sum still owing. 2002, c. 24, Sched. B, s. 13 (8).

Restricted application

Section 13(9): This section does not apply unless the acknowledgment is made to the person with the claim, the person’s agent or an official receiver or trustee acting under the Bankruptcy and Insolvency Act (Canada) BEFORE THE EXPIRY OF THE LIMITATION PERIOD APPLICABLE TO THE CLAIM. 2002, c. 24, Sched. B, s. 13 (9).

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I've posted section 13.9 of the Ontario 2002 Limitations Act a number of times already. You can only renew the limitation period BEFORE the SOL expires; you can't revive it.

However, you're right about the other matter; you do have to be very careful about what you write in letters as demonstrated by Section 13. 8 that goes before it. (The Nova Scotia Act is even more complicated.) That's why I keep telling people: stick with the damn telephone and stay out of unnecessary trouble.

Nonetheless, here we are dealing with a debt that went into default long before Jan.1, 2004 and so the Ontario Limitation Act of 2002 won't apply. The old 6 year limitation period will unless it's a secured debt, criminal award, student loan or other government type liability. I believe the old "ultimate" limitation period on this debt was also 15 years just like with the new Act [Section 15.1 and 15.2] which means the creditor had 15 years to file suit no matter how many times the debtor acknowledged the debt.

Ray

I have been reading about the Statute of Limitations in Ontario and my understanding is that, after 2004, an unsecured debt that was delinquent for two years or more is no longer actionable in court. Before 2004, the statute of limitations was 6 years.

Debts of this nature are also called "stats barred" because creditors are barred from taking legal action to recover the debt. So far, so good.

Many of the collection agencies identified in this forum purchase these old stats-barred debts and begin working them, tracking down each debtor and beginning the process of bullying and harassment.

The harassment includes attempts to remove the "stats barred" status by getting the debtor to acknowledge the debt. Once a debtor does this, the debt is no longer protected by the Statute of Limitations and payment can be sought in court, including garnishing of wages.

There is much confusion over what constitutes legal acknowledgement for this purpose.

I have read in this forum and elsewhere that verbal acknowledgement of the old debt is sufficient. But I've also read that that acknowledgement needs to be in writing, or in the form of a payment made on the debt, in order to make the debt actionable in court.

Section 13 of the Limitation Act deals with acknowledgements. A number of different scenarios are outlined, but then Subsection 10) states that Subsections (1), (2), (3), (6) and (7) do not apply unless the acknowledgment is in writing and signed by the person making it or the person’s agent. 2002, c. 24, Sched. B, s. 13 (10).

So it seems that when a collection agency calls out of the blue, and you answer their questions and even verbally admit the debt, this is still not enough to constitute legal acknowledgement under the SOL.

Can someone please confirm that my understanding of this is correct?