When is a Debt Statute Barred?

A question we get asked on a regular basis is how long can an individual or company peruse a debt in Canada and the United States? In Canada a debt is valid for 6 years. However, there are provincial Statutes of Limitations on when you can sue, or litigate, a debt in different provinces. In the US the Statutes of Limitations for different states can be anywhere from 3 to 15 years. Whether you are lending or collecting, it is wise to be aware of the Statutes of Limitations in the states or provinces where your customers reside.

In Canada most debtors are well aware of the provincial Statutes of Limitation on a creditor being able to commence legal action. A standard debt evasion tactic is for debtors to stall out the lender past the time limit they can sue. While the debt is still considered to be valid for 6 years, in many provinces you must commence legal action within 2 years from the date of invoice, or last payment.

Provincial Time limits on suing for debt

Below you will find the Statutes of Limitations for suing to recover debt in the Canadian provinces and territories:

• Alberta - 2 Years
• BC - 2 Years
• Saskatchewan - 2 Years
• Manitoba - 6 Years
• Ontario - 2 Years
• Quebec - 3 Years
• Nova Scotia - 6 Years
• Newfoundland - 2 Years
• New Brunswick - 6 Years
• PEI - 6 Years
• Yukon - 6 Years
• Northwest Territories - 6 Years
• Nunavut - 6 Years
• Federal - 6 Years

It should be noted that there can be various exceptions in different provinces and territories. In the case of provincial Judgments, the Statute of Limitation is usually 10 Years, which can be renewed for another 10 years.

US Time limits on suing for debt

Besides age, the type of debt can affect different state Statute of Limitations on debt. Here, you will find a general guide for different state debt limitations.

Like Canada, there can be numerous statute exceptions in different states. Also keep in mind that time limits can change.

Large Balance Debt

The effect of statutes limiting when you can sue are minimal when it comes to small balance debt. However, there can be major implications when a large balance debt is stat barred. When extending credit to customers it pays to know any limits on being able to collect your receivable.