But collection agencies can also pass on debts to other collection agencies. So, while collection calls may stop for a period of time, once the debt has been transferred to another collection agency, the collection process can begin again, promising an “indefinite chase.”
What does indefinite chase look like? It can mean regular letters and phone calls until the debt is settled – we’re talking years.
So, is there ever relief if you don’t pay the debt? Collection agencies are bound by legal time limits if they want to take you to court to collect an unpaid claim.
Can debt collection agencies take legal action against you?
The statute of limitations for debts is a set of laws enacted by each county that prevents collection agencies from successfully suing a consumer after a certain amount of time has passed since the debt was acknowledged. This time varies from province to province, although most are two or six years old.
For example, Ontario’s statute of limitations is two years from the last date of recognition, while in Newfoundland it is six years.
However, the “last date of recognition” is subject to interpretation, which can make it confusing for consumers and some experts alike. For example, some estimate that the clock will start ticking within six months of a final payment. But this is not always the case.
Remember: While the statute of limitations on debts protects you from legal action after a certain period of time, it does not protect you from collection requests. You also run the risk of lowering your credit score, making it slow and difficult to rebuild your credit.
In addition, the statute of limitations does not prohibit legal action for all types of debt. The type of debt can therefore determine whether a collection agency can also take legal action against you.
This post How Long Do Debt Collection Agencies In Canada Try To Collect?
was original published at “https://www.moneysense.ca/articles-by-credit-canada/how-long-do-debt-collectors-try-to-collect-in-canada/”