• Skip to secondary menu
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Toronto Real Estate - Max Seal Blog

Toronto Real Estate, Central Toronto Real Estate, Toronto Condos For Sale, Search toronto condos for sale, Max Seal, Broker, iPro Realty Ltd.

  • Toronto Real Estate – Max Seal Blog
  • Home
  • Toronto Condo Evaluation
  • Toronto Real Estate Blog
  • Contact Max
  • Toronto Real Estate News
  • Search Toronto MLS
  • FSBO Expired Seller Free CMA
  • Seller
  • Buyer
  • Privacy Policy

Do not need to acknowledge old zombie debts after two years in Ontario

December 8, 2019 by Toronto Real Estate Blog Leave a Comment

Interest Rate

 

Do not need to acknowledge old zombie debts after two years in Ontario. The statute of limitations is two years in Ontario.

 

The consumers need to be aware of the scourge of indebtedness when taking on more debts and the requirements of their monthly debt payments.

 

Canadians with old debts please beware. A momentary slip or lack of knowledge of your legal rights could results in past debts rising from the dead and coming back to haunt you.

 

Zombie debt — old accounts that may have been written off as “uncollectable” and which have passed the statute of limitations — is expected to increase due to Canada’s high level of consumer indebtedness, say insolvency experts.

 

Canadians have taken advantage of cheap money, with total debt per consumer surging to $71,979 in the second quarter, up from about $57,000 five years earlier, according to credit monitoring service Equifax.

 

Delinquencies are expected to rise once interest rates eventually climb and put stress on the ability of some borrowers to make payments.

 

“The debt is increasing faster. So I would be concerned that there is a jump in people who are finding themselves unable to pay their debts,” says Julie Kuzmic, Equifax Canada’s director of consumer advocacy.

 

Non-payments of debts would lead to more accounts going to collection agencies and aging even after the original creditor loses interest in collecting.

 

“As you get a higher consumer debt level, more and more of those — just by the sheer statistics alone — are going to be older debts,” says Scott Terrio, manager of consumer insolvency at Hoyes, Michalos & Associates, a Toronto-based company specializing in insolvency.

 

Statute of limitations laws across the country protect consumers from lawsuits if their unsecured debt hasn’t been repaid within the allotted time.

 

The statute of limitations is two years in Ontario, Alberta, Newfoundland and Labrador, B.C., P.E.I. and Saskatchewan. It’s three years in Quebec, and jumps to six years in the remaining provinces and territories. The federal limitation is six years.

 

The timelines mean creditors and collections agencies can’t go to court after that period of time to force payment.

 

But that won’t keep aggressive collection agencies at bay. Debt remains on a person’s credit file for six years and technically doesn’t ever vanish entirely.

 

Efforts to collect old debt can resurface after it is sold to a new collections agency for cents on the dollar.

 

Successfully pressuring just a few unwitting debtors to make a payment could be enough to make the exercise profitable for them. “If I collect from one person, I can probably cover 10 or 20 files because I’ve only paid five cents or something,” Terrio said.

 

Zombie debt comes in many forms, including legitimate debts that have been forgotten or ignored, scenarios where innocent parties share the same name of a debtor, or cases of identity theft or computer error.

 

It involves unsecured credit from credit cards, lines of credit, phone bills and the like. It does not apply to secured debt such as mortgages and money owed to government for income tax, property tax, fines, outstanding health care premiums and student loans.

 

Old debt becomes zombie debt when a debtor acknowledges the money owing after the statute of limitations has lapsed, said David Gowling, senior vice-president with MNP Debt, one of Canada’s largest insolvency practices.

 

“That can resurrect it and now you’re starting your whole statute of limitations all over again.”

 

Some cases of zombie debt border on the absurd. Collections agents hounded one person a few years ago for money owed to Eaton’s, even though the department store folded 20 years ago, said Gowling.

 

Experts advise debtors not to acknowledge debt and if threatened with a lawsuit, tell the caller to send proof of the debt. Chances are they can’t and won’t bother because the statute of limitations has passed for seeking a judgment.

 

While some actions by debtors could get the clock ticking again on the statute of limitations, it usually requires that a person acknowledge their debt in writing, said Lee Akazaki, partner with Gilbertson Davis LLP, a Toronto-based law firm.

 

That could include replying to an email agreeing that the debtor owes the money.

 

Responding with “I don’t owe money because that’s an old debt” is not an acknowledgment. “It just means you used to owe the money but you don’t anymore,” he said.

 

Laurie Campbell, CEO of Credit Canada, a non-profit debt consolidation and credit counselling agency, has never come across old debt restarting the statute of limitations countdown clock.

 

She worries that people afraid of being sued will unnecessarily seek a bankruptcy trustee.

 

“People should not be running to see a trustee outside of that two-year window because they’re going to pay fees for something that may never come about anyway,” she said in an interview.

 

Campbell said some people feel a moral obligation to repay debts even though they legally can’t be forced to do so.

 

“Make sure you get the right advice before you make a decision that could harm you in the long-run”, says Campbell. She advises against taking a knee-jerk reaction.

 

Source: The Canadian Press

 

=====================================================================================

 

Thinking to sell your house or Condo in Central Toronto areas and/or in downtown Toronto areas? Please visit http://www.TorontoHomesMax.com for a FREE Home Evaluation“ or please call, text or email Max Seal, Broker at 647-294-1177.  NO obligation.

 

Thinking to buy a House or Condo in Central Toronto areas and/or in Downtown Toronto areas? please call or text Max Seal, Broker at 647-294-1177 to buy your dream home or Condo. I offer you a 30-min “FREE buyer’s consultation” with NO obligation. 

Please visit my website http://www.centraltorontorealestate.com/ to find out available homes and Condos for sale in Central Toronto areas and/or in downtown Toronto areas.

 

This Toronto housing market may be a better time for “Move-up”, “Move-down” or “Empty-nester” Sellers and Buyers. Want a “Market Update” of your home in 2019? Please click the image below or call or text Max Seal, Broker at 647-294-1177 or send an email.

 

Filed Under: Toronto Buyer Posts, Toronto Personal Finance Posts, Toronto Real Estate Posts, Toronto Seller Posts Tagged With: ability of borrowers, advantage of cheap money, aggressive collection agencies, back to haunt, bankruptcy trustee, cheap money, collection agencies, consumer advocacy, consumer indebtedness, credit cards, credit counselling agency, credit file, credit monitoring service, creditors, debtors, debtors not to acknowledge debt, Delinquencies are expected to rise, Equifax, Equifax Canada, fines, high level of consumer indebtedness, higher consumer debt level, income tax, indebtedness, insolvency, insolvency experts, interest rates, interest rates climb, lack of knowledge, legal rights, lines of credit, make payments., momentary slip, money owed to government, mortgages, Non-payments of debts, not to acknowledge debt, old zombie debts, old zombie debts over 2 years, original creditor, outstanding health care premiums, past debts, past debts rising from the dead, phone bills, pressuring unwitting debtors, proof of the debt, property tax, protect consumers from lawsuits, scourge of indebtedness, secured debt, seeking a judgment., sold to a new collections agency, statute of limitations, student loans., timelines, to force payment, total debt per consumer, two years in Ontario., unable to pay their debts, unsecured credit, unsecured debt, unwitting debtors, your legal rights, zombie debts, zombie debts over 2 years

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Toronto Real Estate – Max Seal Blog

Max Seal, Broker,
Call 647-294-1177
Email: email to Max

iPro Realty Ltd., Brokerage
1396 Don Mills Rd, #101, Bldg E, Toronto, Ontario, M3B 3N1

Totonto Market Evaluation Online

TORONTO HOME EVALUATION ONLINE

Call, text, email Max 647-294-1177

Call, text or email Max Seal at 647-294-1177 if you are thinking to sell your upscale or average home in Central Toronto communities like Bedford Park, York Mills, Lawrence Park, Forest Hill, Davisville, Summerhill, Yorkville, Annex, Rosedale,  Leaside and Don Mills.  Please click the link for a FREE Home Evaluation. No obligation.

Font Resize

Search Blog Posts

Recent Posts

  • Toronto Real Estate TRREB Published September, 2022 Resale Market Figures
  • BoC Hikes Interest Rate by 1 per cent in July, 2022, Acts Like a Hammer to Housing
  • Toronto Real Estate TRREB Published August, 2022 Resale Market Figures
  • Toronto Real Estate TRREB Published July, 2022 Resale Market Figures
  • Toronto Real Estate TRREB Published June, 2022 Resale Market Figures

Recent Comments

    Pages

    • Buyer
    • Contact Max
    • FSBO Expired Seller Free CMA
    • Home
    • Privacy Policy
    • Search Toronto MLS
    • Seller
    • Toronto Condo Evaluation
    • Toronto Real Estate – Max Seal Blog
    • Toronto Real Estate Blog
    • Toronto Real Estate News
    Totonto Market Evaluation Online

    TORONTO HOME EVALUATION ONLINE

    Categories

    Archives

    Toronto Real Estate Blog – Max Seal

    Max Seal, Broker,
    Call 647-294-1177
    Email: email to Max

    iPro Realty Ltd., Brokerage
    1396 Don Mills Rd, #101, Bldg E, Toronto, Ontario, M3B 3N1

    Footer

    Copyright @2020 TorontoRealEstateMax.com Toronto Real Estate – Max Seal Blog

    Copyright © 2022 – All rights reserved

    Toronto Real Estate Blog – Max Seal

    Max Seal, Broker,
    Call 647-294-1177
    Email: email to Max

    iPro Realty Ltd., Brokerage
    1396 Don Mills Rd, #101, Bldg E, Toronto, Ontario, M3B 3N1

    Totonto Market Evaluation Online

    TORONTO HOME EVALUATION ONLINE

    Copyright © 2025 · Lifestyle Pro on Genesis Framework · WordPress · Log in