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The statute of limitation was put in place to protect people in cases where a debt has either been forgotten about, or it has now been discovered by a creditor after many years have gone by. In other words it seems like the court system doesn’t want to deal with old claims from many years ago, so they have a limitation period to stop people and companies from suing someone over an old dispute.
Depending on where you live, this will determine the statute of limitation period for you. In Ontario for example, the statute of limitation period is 2 years.
In all cases, the statute of limitations apply to those who have not acknowledged the debt by either making a payment, or have provided something in writing admitting they owe the money on a particular debt.
Some people will tell you, that the statue of limitations starts from the day the bank decides that the debt is no longer collectable, or the feel they will not be receiving a payment. Some other will tell you that it begins from the date of your last payment.
What I can say from personal experience, the statute of limitations shouldn’t be used as a means to get out of paying your debt. The debt will remain owed until you pay it. So it also doesn’t stop anyone from calling you demanding that you make a payment in full. What it does provide you is a form of legal defence to the claim. Remember it still has a negative impact against your credit score.
Check out the video below to learn more about the statute of limitations.
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