Are Your Old Debts Back To Haunt You?

As humans, we’re pretty good at ignoring problems we can’t or don’t want to deal with, hoping they’ll eventually go away. Most often, similar to that blood curdling screech coming from your car, ignoring the ghosts of debts gone by that are haunting your dreams won’t necessarily make them disappear; even though the following might suggest otherwise.

Statute of Limitations Legislation

Statute of Limitations legislation limits collection action by certain unsecured creditors (like credit card debt), or collection agents acting on their behalf. These limits prevent them from taking court action against a debtor after a certain period of time has elapsed since a payment was last received. The length of time varies by province, so you should do some research to understand the laws in your province. In addition, certain debts like student loans, child support and income tax debt for example, are excluded.

Impact on Your Credit Report

Aside from the obvious consequences (costliness, stress, etc.), not paying your debts can also have significant adverse effects on your credit rating. While the timeline for a delinquent account to remain on your credit report is typically between six and seven years, this will vary according to the bureau (Trans Union vs. Equifax) and potentially the province where you live.

Debt Not Likely to Disappear

Does this mean if you ignore them long enough, your debts will eventually just disappear? Unfortunately, that’s not likely.

While your creditors may not be able to sue you for the amount you owe them on statute barred debts, they can continue to make your life miserable — calling family and friends you innocently provided as references on your credit application and calling you at your place of work. Never mind calling you constantly at home and on your cell phone.

They’ll hope to pressure you into paying what has likely grown to a significant sum, and will continue to grow, thanks to ongoing interest and penalty charges. Add all this to the debt you are possibly currently accumulating, and you’ll likely feel like you’re being backed into a corner with nowhere to turn.

Life-Changing Debt Solutions

If you haven’t been as proactive as possible with your debt, it may be helpful (and a relief) to learn that the consequences of ignoring your debt don’t have to be permanent. There are options to finally address your debt issues, past and current, and make sure they go away for good.

At MNP Ltd., we provide a Free Confidential Consultation, where a Licensed Insolvency Trustee will review your unique financial situation and explain all the options available to help you get a fresh financial start. Whether you’d benefit from a Life-Changing Debt Solution such as a Consumer Proposal or bankruptcy, or one of any other helpful resources - your Licensed Insolvency Trustee will provide the advice and tools you need to defeat your debt, turning your restless nights into ones filled with sweet, peaceful dreams.