Understanding Statute of Limitations on Debt by Province
Introduction
Understanding statute of limitations on debt by province is vital for both businesses and consumers. Each province sets a time limit within which creditors can sue for unpaid debt. Once that limitation expires, legal action is barred—but collection may continue. Clarity on these rules helps CGI Credit Guard clients navigate provincial differences while maintaining accurate compliance and advice.
Statute of Limitations on Debt by Province
Creditors can legally sue for debt only within defined timelines, varying across provinces and territories. Once that period ends, debts become “statute-barred”—court action is no longer permitted, though collection efforts (letters, calls) may persist.
Province / Territory Limitation Period (Debt)
| Province/Territory | Limitation Period |
|---|---|
| Alberta | 2 years |
| British Columbia | 2 years |
| Saskatchewan | 2 years |
| Manitoba | 6 years |
| Ontario | 2 years |
| Quebec | 3 years |
| New Brunswick | 2 years |
| Nova Scotia | 2 years |
| Newfoundland & Labrador | 2 years |
| Prince Edward Island | 6 years |
| Northwest Territories | 6 years |
| Nunavut | 3 years |
| Yukon | 6 years |
How the Limitation Clock Starts and Resets
The clock begins from the date of discovery—when the creditor knew or reasonably should have known of the debt—and ends when legal action must begin. Common triggers include:
-
First delinquency date.
-
Last payment date (including partial), provided the payment was made within the limitation period. Making a payment restarts the next limitation period.
What Creditors Can and Cannot Do
-
During limitation period: They can sue, obtain judgment and garnish wages or bank account or take other court order enforcement action.
-
After expiration: They may still contact you but cannot initiate lawsuits.
Statutes of limitation do not erase debts nor stop reporting to credit bureaus—negative marks may remain up to six years from delinquency.
Practical Implications for CGI Credit Guard
Clients must track:
-
Jurisdiction-specific limitation periods accurately.
-
Date of delinquency or dates of last payment.
Conclusion
Understanding statute of limitations on debt by province empowers better credit and compliance decisions. While most provinces limit creditor legal action to two years (or three years in Quebec and Nunavut, six years in the Yukon, Northwest Territories and PEI), payments made within the limitation periods can reset these clocks. Through clear recordkeeping and communication, CGI Credit Guard can ensure adherence to provincial statutes and protect its clients from overstaying legal collection rights.
FAQs
What is a statute-barred debt?
A debt that is past the applicable limitation period and cannot be legally pursued through courts, though remains outstanding.
Can a collector still call after limitation period ends?
Yes. They may contact you but cannot sue.
Does making a payment on old debt restart the clock?
Yes. Even a token payment or written promise resets the limitation period. Note the payment must be made within the limitation period and subsequent limitation periods.
How long does a negative mark stay on credit report?
Most credit reporting agencies retain negative marks for up to six years from the date of delinquency, regardless of statutory limits on legal action.