If you’re dealing with debt collectors, you might be asking yourself: How long can they keep this up? The answer depends on where you live, what kind of debt it is, and whether you’ve taken any actions that might restart the legal clock. Let’s walk through it step by step so you can know your rights and stay in control.
Key Points:-
- The statute of limitations on debt
- What can reset the clock?
- Does the debt ever go away?
- Different rules for different debts
- How debt collectors operate
- Your options for dealing with debt
- Help is out there
The statute of limitations on debt
In Canada, you’ve probably heard of the “statute of limitations.” It’s the legal window during which creditors or collection agencies can take you to court to recover unpaid debts.
Here’s how it breaks down by province:
- In Ontario, British Columbia, and Alberta, the limit is two years.
- In Quebec, it’s three years.
- In provinces like Prince Edward Island or Manitoba, creditors have up to six years.
What happens after this period? Well, creditors lose the right to sue you for the debt, which means they can’t get a court order to garnish your wages or seize your assets. However, the debt doesn’t just disappear—it stays unpaid, and collection agencies can still try to collect it through phone calls, letters, or other non-legal means.
What can reset the clock?
One thing many people don’t realize is that certain actions can reset this limitation period, effectively restarting the countdown. These include:
- Making a payment: Even a small payment can restart the clock.
- Acknowledging the debt: Admitting you owe the money—verbally or in writing—can reset the timeline.
- Agreeing to a payment plan: Formalizing a repayment agreement also restarts the statute of limitations.
This is why it’s so important to be cautious when dealing with collection agencies. Even a well-meaning promise to pay could give creditors more time to pursue legal action against you.
Does the debt ever go away?
A big misconception is that a debt vanishes after the statute of limitations expires. Unfortunately, that’s not true.
The debt still exists and may remain on your credit report for up to six years from the date of your last payment. This can hurt your credit score and make it harder to get approved for loans, credit cards, or even rental agreements.
Debt collectors can also continue contacting you about the debt—though they can’t sue you or take any legal action.
Different rules for different debts
Not all debts are the same, and that can change how long you’re dealing with collection agencies. For example, if you have unsecured debts like credit cards, payday loans, or personal loans, they usually follow the standard statute of limitations in your province.
But when it comes to government debts—like student loans or unpaid taxes—it’s a whole different ball game. These types of debts often don’t have the same limitation periods, so the timelines for legal action or collection can be much longer and more complicated.
If you’re not sure what applies to your situation, don’t guess—it’s always better to get expert advice. Our Licensed Insolvency Trustees (LITs) have helped thousands of people understand their debt and figure out the best next steps. If you’ve got questions or you’re just tired of dealing with this alone, we’re here to give you clear answers and help you move forward. Reach out today and let’s figure it out together!
How debt collectors operate
Debt collection agencies are hired by creditors to recover unpaid debts. Their job is to contact you and try to work out a repayment arrangement. While many follow the rules, some can use scare tactics or push the boundaries of the law.
In Canada, there are strict regulations about how collection agencies can behave. For example, they can’t call you excessively, harass you, or contact you outside of reasonable hours.
If you feel a collection agency is stepping over the line, you can file a complaint with your provincial consumer protection office.
Your options for dealing with debt
If you’re struggling to pay what you owe and the collection calls feel like too much, there are options to help you get back on track.
One option is a consumer proposal, where you work with our LITs to offer your creditors a portion of what you owe, often spread out over monthly payments. This is a formal process that stops collection calls and gives you room to breathe.
You can also try negotiating directly with creditors or collection agencies. Sometimes, they’re willing to accept less than the full amount owed or work out a payment plan that fits your budget.
In more severe cases, bankruptcy might be a solution. While it’s not anyone’s first choice, it can provide a clean slate for those feeling completely overwhelmed by their debts.
Help is out there
Debt can feel like a huge weight on your shoulders, especially when the calls just keep coming. But here’s the good news: you don’t have to face this without a plan. Understanding how long collectors can pursue you—and what they can legally do—puts you back in the driver’s seat.
If it’s all starting to feel like too much, pick up the phone and give us a call. Our LITs specialize in helping people tackle their debt and move toward financial freedom. Whether you need help stopping the calls, negotiating with creditors, or exploring options to reduce what you owe, we’re here to make it simple.
Call us today. Let’s get you started on the road to a fresh start.
