Join millions of Canadians who have already trusted Loans Canada
Apply Now

Both the Federal and Provincial Governments of Canada have statutes of limitation, which state the maximum, legal time that a lender or creditor has to peruse legal action on an unsecured debt. These laws state that if an unsecured debt is not collected and payments are not being made, within an allotted period of time, creditors and collection agencies cannot take legal action against you.

Statute Of Limitations By Province

According to the Federal Government of Canada, debt generally cannot be pursued after 6 years. Based on which province you live in, the statute of limitations will vary, typically ranging anywhere from 2 to 10 years.

According to the Federal Government of Canada, debt generally cannot be pursued after 6 years. Based on which province you live in, the statute of limitations will vary, typically ranging anywhere from 2 to 6 years.

British Columbia 2 years
Alberta2 years
Saskatchewan2 years
Manitoba6 years
Ontario2 years
Quebec3 years
New Brunswick2 years
Newfoundland and Labrador2 years
Nova Scotia2 years
Prince Edward Island6 years
North Western Territories6 years
Nunavut6 years
Yukon6 years
Note: If you make a payment towards your outstanding debt or acknowledge your debt before the end of your statute of limitations, then the statute of limitations resets.

How Does it Work?

Let’s say you live in Ontario and haven’t made any payments on your car loan. Your debt collector has up to two years to collect the outstanding debt and pursue legal action against you. If two years pass and you still haven’t made any payments toward your car loan, your debt collector cannot take legal action.

However, this does not mean that they cannot attempt to collect the debt from you. They can still contact you in an effort to collect payment. However, they cannot take legal action against you such as suing you to court. 

 Find out what happens when you miss a loan payment.

What Is Re-Aged Debt? 

Creditors and collectors can reset this statute of limitations, which extends the amount of time that creditors and collectors can use the law in order to collect a debt. Resetting this law is based on the actions of you, the borrower. Any of these actions can re-age the debt, which basically resets the statute of limitations. With your debt re-aged, collectors have the time and right to take legal action in order to collect the debt.

  • Any Payments –  if you make a payment on your debt, it will activate the re-ageing process and you will again be responsible to pay back your debt. 
  • Acknowledgement of debt – if you inform (in writing) the debt collector or creditor that you have intentions to pay in the future, your debt will be renewed.

Speak With A Debt Expert


What Should You Do If Your Creditor Tries to Contact You? 

Past the Statute of Limitations

If creditors or collection agencies ever contact you, do not answer their questions or give out voluntary information. Instead, take down their personal information and the details about your debt, mainly when your debt became past due. Verify the information and see if it’s correct. If your debt has passed the statute of limitations for your province, collectors are not legally allowed to sue you in order to collect the outstanding debt. 

Before the Statute of Limitations

If a collector contacts you before the statute of limitation, then they have the right to take you to court. If they file a lawsuit against you, you will be notified.  It may be in your best interest to speak to the collector and come up with an agreement. 

Statute of Limitations FAQs

Will my debt be erased after the statute of limitations period? 

No, your debt does not disappear once it’s past the statute of limitations. Debt collectors simply won’t be able to take legal action against you. However, they can still contact you to try and collect payment. 

What can reset the statute of limitations period? 

If you make a payment to the debt or if you send a letter acknowledging the debt, the statute of the limitation period can be reset. 

Will my debt disappear from my credit report after 6 years?

After 6 years unpaid accounts will disappear from your credit reports, however, that doesn’t mean you are debt-free. Your creditor or debt collector can continue to contact you for payment as long as they wish.

Bottom Line

It is extremely important to know the rules and regulations concerning debt collection, as this can prevent you from being taken advantage of. On the other hand, it should always be your number one goal to pay back your creditors and work toward being debt-free. Always check the statute of limitations for your province, and verify how long your creditor or lender has to take legal action against you.

Caitlin Wood avatar on Loans Canada
Caitlin Wood

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

More From This Author

Special Offers

More From Our Experts
How Will The Bank Of Canada’s Interest Rate Hike Affect You?

By Maidina Kadeer
Published on June 8, 2023

The interest rates set by the Bank of Canada, also known as the ‘bank rate’, is a key factor in determining the cost of borrowing money.
Tim Hortons’ First Credit Card Coming To Canada

By Stefani Balinsky

Tims first credit card is a Mastercard® and it is coming to Canada in the next few months. You'll want it if you like earning rewards fast
Is The Vanilla Prepaid Card The Best On The Market?

By Lisa Rennie

What is the main advantage to a Vanilla Prepaid Card? If you cannot access credit and you don't want to commit to cash, then Vanilla is always
Cash Money Versus easyfinancial Loans

By Bryan Daly

There are major differences between Cash Money and easyfinancial loans. Cash Money doesn't need as much information but easyfinancial has more
easyfinancial Loan Alternatives

By Bryan Daly

If you've been rejected a loan from easyfinancial, you'll be happy to know that there are plenty of easyfinancial loan alternatives in Canada.
How To Refinance A Mazda Car Loan

By Bryan Daly

If you're finding it difficult to keep up with your Mazda finance payments, find out if refinancing is an option for you.
How To Pay Off Student Debt In Canada Quickly

By Corrina Murdoch

When it comes to paying off student loan debt in Canada, is there a way to accelerate the process and get out of debt sooner?
Best Credit Cards With Extended Warranty 2023

By Matthew Taylor

A credit card extended warranty is a great tool to have and take advantage of. Especially for consumers who purchase expensive electronics

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Expert Tips
And Advice

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card