Unpaid credit card bills 6 years old

I have heard that after 6 years (if there has been no court judgement) that a creditor can no longer collect on a bill if no payments have been made during that time. Is this true? <br /><br />Does it have the same effect to credit as bankrupcy? Would there be a point to going bankrupt after this period of time has elapsed?


Asked over 5 years ago in Victoria, British Columbia
Categories: Debt & Bankruptcy

Answer Now

Reply by Admin Administrator

I've tried, but no one knows this answer.  Sorry.

Posted over 5 years ago

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Search the Lawyer Directory.


Reply by Legalservices afterfostercare

I have located a professional who specializes in Bankruptcy law in Canada and have invited him to come to the Board to answer this question with a direct link to the post. Hopefully he comes or sends someone to help.

http://www.hoyes.com/hoyes-licensed-bankruptcy-trustee.htm

Posted over 5 years ago

Former Foster Child Executive Director Foster Care Council of Canada http://www.afterfostercare.ca http://www.fostercarenews.blogspot.com

I am not a lawyer


David Page

Answer by David Page

VerifiedOntario lawyer

Hi Billy:

Everyone wishes they had a credit card that enabled them to charge purchases and then never get a bill.  Did you manage to find one that waits six years?  Well the six years seems to be up and it is time to pay your lawfully incurred obligations. If there is some reason why you cannot pay said obligations, discuss bankruptcy with a bankruptcy counsellor or restructuring your finances with a credit counsellor.  If you lent money to a friend on an IOU and forgot about it for six years, then found the IOU, what would you expect your friend to do if you wanted the money?

Good luck!

David

Posted over 5 years ago

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Contact David Page, or search the Lawyer Directory.


Comment

Honestly, I was expecting to see responses regarding the <strong>LAW</strong>. I understand that people feel that morally one should pay all debts. I&#039;m after legal advice and not moral scolding.<br /><br />I&#039;ve done some research and the following links offer some insight:<br /><br /><a href=http://www.hg.org/articles/article_865.html>http://www.hg.org/articles/article_865.html</a><br /><br />Check out paragraph 2 - Limitation Periods<br /><br /><a href=http://www.bclaws.ca/Recon/document/freeside/--%20l%20--/limitation%20act%20%20rsbc%201996%20%20c.%20266/00_96266_01.xml#section3>http://www.bclaws.ca/Recon/document/freeside/--%20l%20--/limitation%20act%20%20rsbc%201996%20%20c.%20266/00_96266_01.xml#section3</a><br /><br />Check out section 3(5).<br /><br />The real question was whether to wait for the time to expire or to go bankrupt and the ramifications of either...<br /><br />I have talked to a Collection worker for a private company and they&#039;ve explained to me that at this point going Bankrupt is not an option and to allow the Limitations Act to take force...<br /><br />Here was the reasoning, since the Limitations Act says the limit is 6 years, this can no longer appear on your credit report because it is not a valid claim. A bankruptcy will be with you for the rest of your life. Any future loans or forms may ask if you&#039;ve filed for bankruptcy before.<br /><br />As for giving a friend an IOU and then &quot;finding&quot; it after six years...would you really expect your friend to pay you after that period of time? I certainly would let that go...write it off the same as the banks do.<br /><br />Nothing stays on your credit record beyond seven years. Credit card companies cannot legally collect after six years of no action. <br /><br />So David, given the legal links above, do you have any further comment? What does the law state?<br /><br />We read stories all the time of big companies not paying their debts...why is it wrong when a consumer cannot and decides enough is enough from the big corporations such as banks?

Posted over 5 years ago


Larry Crossan

Answer by Larry Crossan

VerifiedOntario lawyer

Hi Billy,

I notice from your profile that you are in BC.  Since I am only licensed to practice in Ontario, I cannot comment on BC law.  I can confirm, however, that as long as nothing was done to acknowledge and confirm the debt, although the debt is not legally extinguished, it becomes unenforceable after the time limit set out in the Limitations Act.  Furthermore, the Ontario Limitations Act has now reduced the general limitation period to two (2) years.  You might want to check the current version of the BC legislation to be sure the time limit is still six (6) years.

I cannot comment on whether an unenforceable debt can appear on a credit report.

Larry

PS - It is wrong when any person - individual or big company - cannot pay their debts.  When a big company cannot pay, it will either become subject to bankruptcy-type proceedings or, if it is beyond hope, may be left to effectively die.  The only difference is that if many employees or suppliers rely on the big company, governments and creditors may be more likely to help it out or compromise.  There's an old joke that goes something like "When a borrower cannot repay a $500 debt, the borrower is in trouble.  When a borrower cannot repay a $5,000,000 debt, the lender is in trouble."

Posted over 5 years ago

Larry Crossan, BCom, JD, MBA Certified Specialist (Corporate and Commercial Law) P: 519.858.2222 | F: 519.858.2323 629 Wellington Street, London, ON N6A 3R8 www.lexcor.ca Strictly Business®

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Contact Larry Crossan, or search the Lawyer Directory.


Comment

I would like to thank those people that replied to this Forum thread.<br /><br />Larry, you gave me a ray of hope. <br /><br />After having credit card debt for so long and having creditors harass, threaten, and then more than triple original amounts owed there was a little stress. What originally started out as about $17,000 in unsecured credit card debt, without the ability to pay, ballooned to about $60,000+ in a few short years the creditors were demanding (not including the secured debt that was being paid).<br /><br />6 years have passed and there are no more letters or phone calls.<br /><br />In British Columbia (and two other provinces), after 6 years of the last payment if the creditor has not sued, been given an acknowledgement of the debt (written), or no action (payment) has been done on the account, then it is legally <strong><em>EXTINGUISHED</em></strong>. It can no longer appear on your credit report and there is no one to pay. <br /><br />If you are considering bankruptcy, read the below book before you go ahead with it. <br /><br />Mark Silverthorn has a good book called, <em>The Wolf at the Door</em> (ISBN 9780771080364), which details the various options for people in debt trouble and it is a valuable read. &quot;A practical guide for dealing with collection agencies and your debts, from Canada&#039;s top expert.&quot;<br /><br />I know there are people that believe all debts should be paid. I agree...when you have the means. If you have a bad run of things, honestly, then you have to survive. <br /><br />Another note, if you are considering bankruptcy, remember that your RRSPs can only be taken for your contributions in the last year and not the entire amount. TFSA have no protection and it all can be taken.

Posted over 4 years ago


Comment

The six years could refer to two things... Statutes of limitations and the amount of time the item is shown on your credit report.<br /><br />You should the number of years your statutes of limitations is in your province.&nbsp; Call consumer protection to ask.&nbsp; It&#039;s usually 2-4 years depending on which province you live in.&nbsp; If the item isn&#039;t paid after 2 years for example, the company won&#039;t be able to sue you for the debt.<br /><br />As well, after 6 years items naturally drop off the Equifax and TransUnion credit report.&nbsp; The exception to this is bankruptcy items which last 7 years.

Posted over 4 years ago


Comment

Thanks to everyone above, you have answered most of my questions. <br /><br />I am in BC and defaulted on my credit cards about twelve years ago and have not used any sort of credit since.&nbsp; i would like to rebuild my credit rating by getting a new credit card (older and wiser now and won&#039;t make the same mistakes again).&nbsp; I am concerned that if i apply for a credit card i will somehow end up with a bill for the old debt plus twelve years of interest which would pretty much ruin me.<br /><br />Are there any loopholes for the credit card company to come after me if i apply for a new card?&nbsp; I have read the application form and can&#039;t see anything but i am not sure.

Posted over 4 years ago


Comment

<br /><span style="font-family: Times New Roman; font-size: small;">Hi All,</span> <br /><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span> <br /><span style="font-family: Times New Roman; font-size: small;">This is Billy back again. I see that now the posts do not contain the name of the poster unless you&rsquo;re a lawyer.</span> <br /><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span> <br /><span style="font-size: small;"><span style="font-family: Times New Roman;">Well, I&rsquo;m still disturbed by the post by David Page (I wish he would have seen through the ethical and responded with the practical&hellip;of course some people can not&hellip;I guess he&rsquo;s been given too much in his life [or never gone out on a limb as an entrepreneur] and never had to worry about anything). He never acknowledged the legal response I posted...I will refer to the published book by <span class="question-p">Mark Silverthorn called, </span><em>The Wolf at the Door</em><span class="question-p"> (ISBN 9780771080364)&hellip;read it and learn.</span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span class="question-p"><span style="font-size: small;"><span style="font-family: Times New Roman;">Since my first post, here is what I&rsquo;ve done&hellip;</span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span style="font-size: small;"><span style="font-family: Times New Roman;"><span class="question-p">I got a secured credit card (after the 6 year limit in </span><span class="question-p">British Columbia</span><span class="question-p">) and used it for regular expenses and paid it regularly and never had a balance unpaid. That was in February 2010. Back then the bank/credit card companies would not give me credit. <span style="mso-spacerun: yes;">&nbsp;</span></span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span class="question-p"><span style="font-size: small;"><span style="font-family: Times New Roman;">Come March, I did receive one final call from a collection agency&hellip;at Work&hellip;I told them that the 6 year period had elapsed and that they were breaking the law and to never call again and they stopped. The power of Knowledge is incredible and uplifting! </span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span class="question-p"><span style="font-size: small;"><span style="font-family: Times New Roman;">Come November 2010 I needed to get some tires. I applied for credit and was hoping to get enough to cover the tires and was approved for 10 times the price of four tires&hellip;my credit has been restored!</span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span class="question-p"><span style="font-size: small;"><span style="font-family: Times New Roman;">So to the last poster&hellip;12 years? You are fine, now you need to build up your credit rating. Get some credit whether it be secured or unsecured but do it and start anew. It can be done.</span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span class="question-p"><span style="font-size: small;"><span style="font-family: Times New Roman;">People please know your options&hellip;if your debt is unsecured, you may not need to go Bankrupt but wait the same period of time (with collection people calling&mdash;just ignore the phone calls) as Bankruptcy (without the mark and petty payments to creditors)&hellip;if your debt is secured then I suggest you go a different route.</span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span class="question-p"><span style="font-size: small;"><span style="font-family: Times New Roman;">Either way, consult the book I listed above&hellip;I do not know Mark Silverthorn but I would like to thank him personally for initially giving me peace of mind and for spelling out debtors rights. I doubt he reads these forums but a moderator should try to get him to be part of them for correct advice.</span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span class="question-p"><span style="font-size: small;"><span style="font-family: Times New Roman;">Just remember that your debt will eventually be Extinguished. Once that happens you can enjoy! There are no loopholes!</span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span style="font-size: small;"><span style="font-family: Times New Roman;"><span class="question-p">I wish the word could be spread across </span><span class="question-p">Canada</span><span class="question-p">! I&rsquo;ll bet there are a lot of people out there thinking the worst and feeling really down on themselves like I was with no answers&hellip;the answer is to persevere. It will get better.</span></span></span> <br /><span class="question-p"><span style="font-family: Times New Roman; font-size: small;">&nbsp;</span></span> <br /><span class="question-p"><span style="font-size: small;"><span style="font-family: Times New Roman;">Take care people. </span></span></span>

Posted almost 4 years ago


Comment

<br />lol at David

Posted over 3 years ago

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