All information provided in this article is sourced from publicly available materials and is intended for general educational purposes only. It does not constitute legal advice. 4 Pillars is a debt advocacy firm and is not a law firm. For legal advice specific to your situation, please consult a qualified lawyer in your jurisdiction.
If you’ve been contacted about a debt from years past, understanding Ontario’s statute of limitations could be the key to protecting yourself from unfair collection actions.
In this article, we’ll be covering the statute of limitations on debt in Ontario, any exceptions to the rule, and how debtors can avoid accidentally resetting this limitation period.
If you’re dealing with overwhelming debt or aggressive collectors, 4 Pillars Financial Wellness Advocates can help you understand your rights and explore debt resolution options that work for your situation. Our experts can guide you through the complexities of limitation periods, debt verification, and collection practices to ensure you’re fully protected under the law.
What is the Statute of Limitations on Debt in Ontario (2026)?
The statute of limitations on debt refers to the legal time limit creditors and debt collectors have to pursue collection through the courts in Ontario. These time limits are set out by the Ontario Limitations Act.
In Ontario, the statute of limitations on debt is 2 years from the date of your last payment, or the date in which you last acknowledged the debt, whatever is most recent.
Generally, the 2-year limitation on debt applies to credit card debt, personal loans, payday loans, and lines of credit.
Statute of Limitations on Debt Outside of Ontario (2026)
If you live outside of Ontario, you can find the statute of limitations on debt in your province below:
- Alberta: 2 years
- British Columbia: 2 years
- New Brunswick: 2 years
- Nova Scotia: 2 years
- Saskatchewan: 2 years
- Quebec: 3 years
- Manitoba: 6 years
- Newfoundland and Labrador: 6 years
- Prince Edward Island: 6 years
- Nunavut: 6 years
- Northwest Territories: 6 years
- Yukon: 6 years
Exceptions to the 2-Year Statute of Limitations on Debt (2026)
There are several types of debt where the specific 2-year limitation won’t apply.
Statute of Limitations on CRA Tax Debt
The Canada Revenue Agency operates under different limitation rules than general creditors. CRA has 6-10 years to collect depending on the type of tax debt, meaning their collection powers last significantly longer than typical consumer debts (credit card debt, personal loans.etc).
Canada Pension Plan (CPP) and Old Age Security (OAS) debt is the only type of CRA debt that has no limitation period.
Statute of Limitations on Student Loans
Student loan debt is also governed by the CRA, which means statute of limitations are different.
In Canada, student loan debt generally has a 6-year limitation period. However, a judgment can be made against you within this timeframe to extend the limitation period. You can read more about this on the Government of Canada website.
Statute of Limitations on Secured Debts in Ontario
Secured debts include mortgages, car loans, or any debt secured via a physical asset. Secured debts can have a longer limitation period of up to 10 years or more.
That said, some secured debts may fall within the same 2-year limitation period. It depends. It’s best to speak with a lawyer to know what applies to you.
Statute of Limitations on Spousal Support
As of 2026, spousal support claims have no limitation period. Court action can be pursued against you at any time.
Resetting the Statute of Limitations: What Causes It and How to Avoid It
If you aren’t careful, you may end up “resetting the clock” on your debt’s statute of limitations, which prevents the debt from becoming “statute-barred” and prolongs the limitation period.
What Restarts the Limitation Period on Debts
- Making a payment on the account, even if it’s just a partial payment.
- Agreeing to a new payment arrangement or settlement plan, which can be considered an acknowledgment of the debt.
- Formally acknowledging that the debt is yours in writing or while being recorded during a conversation with a creditor or collector.
- Using the account again (such as making a new charge on a credit account) may reset the limitation period.
What Happens After the Statute of Limitations on Debt Takes Effect?
Once the statute of limitations on debt takes effect, the debts become “statute-barred”.
What Creditors and Collectors Can’t Do About Statute-Barred Debt
After 2 years, creditors and debt collection agencies can no longer sue you for statute-barred debt. They also can no longer pursue a court order to freeze your bank account or garnish your wages.
Moreover, they cannot misrepresent their legal rights or use abusive or misleading tactics, even when pursuing debts within the limitation period.
What Creditors and Collectors Can Do About Statute-Barred Debt
Even after the statute of limitations on debt takes effect, collectors may still contact you through phone calls and letters, subject to specific restrictions on timing, frequency, and content.
If a Creditor Sues You After the Statute of Limitations Takes Effect
A creditor or debt collector may still attempt to sue you for your outstanding debts, despite the fact the debts are technically statue-barred. If this happens, you are able to use the statute of limitations as a defense in any lawsuits related to your debt.
If you have been sued by a creditor or debt collector, you should get in contact with a lawyer as soon as possible.
How to Deal with Collection Calls After Your Debt is Statute-Barred
If you are still getting collection calls after the statute of limitations on debt takes effect, it’s important to be mindful of how you respond next.
Zach Brull, who leads the North York/North GTA branch of 4 Pillars, gives straightforward advice and debunks misconceptions regarding collection calls in this video. Watch it to find out how to react, what to avoid, and how to protect your debtor rights:
Risks Involved with Waiting for the Statute of Limitations on Debt
Some people who cannot pay their debts choose to rely on the statute of limitations to erase the debt. The truth is, it’s not that easy. Statute-barred debt is still debt under your name that you’re responsible for. Here are some of the risks to keep in mind if you’re planning to wait out the limitation period on debt in Ontario.
- The limitation period does not erase the debt, it only limits a creditor’s ability to sue you through the courts.
- The debt can still appear on your credit report for up to six years from the date of last activity, even if it’s statute-barred. This can significantly impact your ability to qualify for a mortgage, car loan, or other financing.
- The creditor/debt collector can sue you at any time within the limitation period. If you are served with a lawsuit and fail to respond in time, the creditor could obtain a default judgment against you — even if you were close to the limitation deadline.
- Interest can still accumulate on the debt, which will be very problematic, especially if your debt fails to become statute-barred (due to accidentally restarting the limitation period or because the creditor/collector is suing you).
- Collection activity does not automatically stop once the limitation period passes. While collectors cannot successfully sue on a statute-barred debt (if you raise the limitation defense), they may still contact you within the rules set out under Ontario collection laws.
Resolving the Debts Through a Consumer Proposal
For many Canadians, waiting for a debt to become statute-barred is not the most reliable solution. A more structured option may be resolving the debt through a consumer proposal.
A consumer proposal is a formal, legally binding agreement made under the Bankruptcy and Insolvency Act. It allows you to settle your unsecured debts for less than the full amount owed, while protecting you from legal action and collection activity. You can learn more about how it works here.
A consumer proposal doesn’t just stop you from getting sued, it can completely relieve you of your debts as long as you follow the rules set out in the proposal.
Statute-barred debt can prevent you from getting sued, but it won’t relieve you of your debts, and you will continue to face the consequences for any amounts outstanding.
Unlike simply waiting out a limitation period, a consumer proposal provides certainty. You are not relying on technical timelines, nor are you risking a lawsuit or accidental acknowledgment that could reset the clock. It is a proactive strategy that resolves the debt rather than postponing it.
Find Out if a Consumer Proposal is Right for You — Book a Consultation Now!
