How Long Can a Collection Agency Try to Collect in Canada?
In Canada, the process of debt collection is governed by various laws and regulations that protect both debtors and creditors. One common question that arises is: how long can a collection agency try to collect in Canada? Understanding the time limits for debt collection is crucial for both individuals and businesses to ensure they are aware of their rights and obligations.
Time Limits for Debt Collection in Canada
The time frame within which a collection agency can attempt to collect a debt in Canada is generally governed by the Limitations Act. This act sets a general limitation period of two years for most civil claims, including debt collection. However, it is important to note that certain exceptions may apply, depending on the specific circumstances of the debt.
Exceptions to the Limitation Period
In some cases, the limitation period may be extended or shortened. For example, if the debtor has admitted liability for the debt, the limitation period may be deemed to have started from the date of admission. Additionally, if the debtor has made a payment towards the debt, the limitation period may be paused, and the clock may restart upon the next payment.
Collecting a Debt After the Limitation Period
Once the limitation period has expired, a collection agency cannot legally pursue the debt through legal action. However, this does not mean that the debt is forgiven. The debtor is still responsible for the debt, but the collection agency cannot take any further action to recover the debt, such as filing a lawsuit or garnishing wages.
Options for Debtors
If a debtor is facing debt collection efforts beyond the limitation period, it is important to take action to protect their rights. Debtors can request the collection agency to provide proof that the debt is within the limitation period. If the agency cannot provide such proof, the debtor may have grounds to dispute the debt and seek legal advice.
Conclusion
Understanding how long a collection agency can try to collect in Canada is essential for both debtors and creditors. While the general limitation period is two years, exceptions may apply depending on the specific circumstances. Debtors should be aware of their rights and seek legal advice if they believe they are being pursued for a debt beyond the limitation period. By being informed, individuals and businesses can navigate the debt collection process effectively and protect their interests.
