The Limitations Act on Debt in Canada places limitations on creditors who are looking for payment or to file legal proceedings against a creditor. As of January 2004, the Act states that after two years, everyone from banks to credit card companies can file court proceedings against people. This is why it is incredibly important to work on repayment before the situation becomes incredibly serious.
Collection Agencies and Lawsuits
Thanks to the Statute of limitations on debt, creditors and collection agencies can sue people for debt. This means that the agency has sent repeated communications to people and has not received communication back or repayment of the debt.
Reductions, Repayment, and the Limitations Act
Court proceedings usually only happen if people haven’t made attempts to pay off their debt. Thus, as long as a person is in touch with creditors and submitting payments, legal action will not be taken. However, people need to show creditors that they want to pay off their balance and associated fees. After all, most businesses and groups just want their money. Going to court is costly and only worthwhile if no payment has been made and the group is looking for some cash flow.
Talk to the Creditor
If the two-year mark is coming up, accountholders need to reach out to the creditor. Communication is the very step to success. This could mean writing a letter explaining one’s financial situation, or it could mean calling groups up and taking to financial counselors or company representatives. The creditor may be open to a repayment schedule or plan or debt settlement. Additionally, some groups could also be open to debt consolidation.
It helps to take a good hard look at one’s income and expenses before talking to creditors. Sorting through one’s financial situation ensures that he or she knows what can be paid each month. It makes no sense to go into further debt by promising a high monthly payment.
Most creditors are more than willing to work out a repayment schedule that involves lower monthly payments. They would much rather see regular payments than no payments at all. Going to the courts costs time and money. Thus, if a person reaches out and asks for help with a revised repayment plan, most groups will be more than willing to negotiate and compromise. Such discussions could also alter interest rates and associated fees to the account. For example, a credit card company might waive over-balance fees as long as minimum monthly payments are submitted.
Consider Debt Consolidation Loans and Credit Cards
Debt consolidation happens when one balance is paid off with another balance. For example, one could apply for a consolidation loan from a bank to pay off overdue balances or could use a high-balance credit card for this purpose. This gets the creditor off his or her back and could lower the number of balances one has to worry about each month.
Talk to Financial Experts
Before agreeing to any one solution, it is wise to talk to professionals. There are many citizens who are struggling to make payments. Talking to counselors will help people make smart decisions about how to quickly pay off this debt and avoid legal proceedings. These professionals can offer a lot of advice. For example, they will sit down with a client and help him or her figure out a workable budget, which bills to pay off first and how to communicate with creditors. Having such support makes debt repayment seem possible.
The longer people wait, the bigger the debt will be. This is one of the many reasons that a statute of limitations exists. Procrastination just means that the overdue and overbalance fees will continue to collect and that interest will still be charged to the account. Acting quickly means that one can work out a plan and eliminate stress from his or her life.
How the Two-Year Process Works
The great thing about the Act is that once communication has begun and a payment is made, the two-year statute is re-instated. Thus, both businesses and customers are protected. The creditors see cash flow in payments and accountholders struggling with debt can avoid court.
The legal proceedings can be costly and time-consuming. One could end up not only owing the original balance and associated fees and interest but could end up paying off court fees and could even face jail time. Most businesses only go down this road if an accountholder has been avoiding all communication and hasn’t made a payment in two years.
What Court Looks Like
Debt can be intimidating and overwhelming. However, despite what people may think, there is help out there. The two-year limit is in place to help people so that they are now buried in debt and bills. Businesses can get the money they are owed and people can jump-start the repayment process. There is help out there if people pick up the phone and talk to creditors. This is chance to move forward one payment at a time.
InfoAviator Publishing is a organization determined to help consumers understand the (Statute Of) Limitations Act On Debt In Canada that are currently residing in the provinces of (but not limited to) Ontario, Nova Scotia, Quebec, New Brunswick, British Columbia, Manitoba, Prince Edward Island, Alberta, Saskatchewan, and Newfoundland and Labrador, in Canada.