What Is the Statute of Limitations on Debt in Canada?

What is a statute of limitations?

A statute of limitations is a law that puts a deadline on how long a creditor has to take you to court over an unpaid debt. Without it, a creditor could come after you decades later for a balance you forgot about.

Once the limitation period expires, the debt becomes time-barred. A creditor or collection agency can still file a lawsuit, but you can raise the expired limitation period as a defence, and the court will dismiss the claim.

This doesn’t mean the debt disappears. You still technically owe the money. But if you raise the defence, the creditor has no legal power to force repayment. In practice, that changes what a collector can realistically do.

If you ignore the lawsuit, you lose by default. The court enters a judgment against you even if the limitation period has expired. Respond to every lawsuit.

How does a statute of limitations work?

It’s simpler than most people think. The clock starts running from whichever happened last: the date of your most recent payment (even a small one), or the date you acknowledged the debt in writing or verbally.

If the countdown runs out without either of those things happening, the debt becomes unenforceable. The creditor loses the right to successfully sue you.

Here’s the part that catches people off guard. If you make a payment, even a token $20, or respond to a collector’s letter saying “I know I owe this,” the clock resets entirely, but only if the limitation period hasn’t already expired. In most provinces, a payment or acknowledgment made after the deadline has passed does not restart the clock.

When the clock does reset, the debt becomes what’s known as “re-aged,” and the creditor gets a fresh limitation period to pursue legal action.

Debt collection agencies know this, which is why they sometimes encourage a small “goodwill payment” or ask you to confirm the debt in writing. In my experience, that’s one of the most common traps people fall into with old debt.

If a creditor does take action within the limitation period and obtains a court judgment, they gain powers that go well beyond phone calls. A judgment can lead to wage garnishment or, in some cases, a lien against your home. Judgments can also be renewed and enforced for significantly longer than the original limitation period.

What is the statute of limitations on debt in Canada?

Each province and territory sets its own limitation period for unsecured debt. As of February 2026, these range from two to six years, depending on where you live.

Each province has its own legislation (Ontario’s is the Limitations Act, 2002; British Columbia’s is the Limitation Act and so on).

Here are the current limitation periods by province and territory:

Limitation Period	Provinces and Territories
2 years	Ontario, Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia
3 years	Quebec (under the Civil Code of Quebec, art. 2925)
6 years	Northwest Territories, Nunavut, Yukon, Newfoundland and Labrador, Prince Edward Island

Provinces where the limitation period has changed or is disputed include New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. All have updated their limitations legislation in recent years.

Several of these provinces moved from a six-year to a two-year general limitation period, but how those changes apply specifically to consumer debt is not always straightforward.

If you live in one of these provinces, confirm the current limitation period with a Licensed Insolvency Trustee before relying on it.

That means a creditor in Ontario has just two years from your last payment or acknowledgement to file a lawsuit, while a creditor in Prince Edward Island has six.

If you’ve moved provinces, the applicable limitation period depends on several factors, including the jurisdiction specified in your credit agreement, where the debt was incurred, and where the creditor is located. Talk to a trustee if you’re unsure which period applies to your situation.

Even after the limitation period expires, the debt will remain on your credit report. Negative information generally stays on your credit file for six years from the date of last activity.

Some records, such as bankruptcies and judgments, may remain on TransUnion for seven years in certain provinces, including Ontario. Whether you’ve paid the debt or not makes no difference to the timeline.

Source: Equifax Canada – Dispute Credit Report and FCAC – How long information stays on your credit report

What are the exceptions to the statute of limitations on debt in Canada?

Provincial limitation periods apply to unsecured debts like credit cards, personal loans, and phone bills. Some debts follow entirely separate rules.

The CRA has its own collection limitation periods, independent of provincial law. Income tax debt and GST/HST remittance debt both carry a ten-year collection limitation period.

Other CRA debts, such as employment insurance overpayments, payroll debt, and customs debt, have a six-year period.

The CRA’s clock can reset if they take collection action during that period, such as issuing a garnishment, applying a tax refund to your balance, or certifying the debt in Federal Court.

Source: CRA – How long a debt can be collected

Federal student loans carry a six-year limitation period under the Canada Student Financial Assistance Act, starting from the day the loan comes into effect. Your province doesn’t matter for this one.

Source: Canada Student Financial Assistance Act, s. 16.1

Secured debts, court judgments, family support obligations, and debts arising from fraud are also excluded from standard provincial limitation periods and can be pursued for much longer.

Can I still be chased for debt after the statute of limitations has passed?

Yes. Creditors can still contact you. They can still send letters and make phone calls. What they can no longer do is successfully sue you, as long as you raise the expired limitation period as a defence in court.

If you respond to those calls or letters before you’ve confirmed the limitation period has passed, you risk acknowledging the debt and resetting the clock.

If the limitation period has genuinely expired and a creditor tries to sue you anyway, you’ll need to file a Statement of Defence with the court. This tells the court the debt is statute-barred and should be dismissed. You may need to appear in court to confirm this.

If you ignore the lawsuit, the court enters a default judgment against you, even if the limitation period has expired. A default judgment gives the creditor the power to garnish your wages, freeze your bank accounts, and register a lien against your property.

In practice, lawsuits over statute-barred debt are uncommon. Court action costs money, and most creditors won’t bother, particularly if the debt is relatively small or you have few assets. But if it happens, you must respond and raise the defence.

Does statute-barred debt still affect my credit score?

Yes. The limitation period and your credit report operate on completely separate timelines.

Even after the limitation period expires, the debt can still appear on your credit file for up to six years from the date of first delinquency. That can affect your ability to get a mortgage, a car loan, or even a rental agreement.

If you’re carrying old debt that’s dragging down your credit, a Licensed Insolvency Trustee can walk you through the options for dealing with it properly, rather than just waiting it out.

What if I accidentally acknowledge an old debt?

Saying something like “I know I owe that” to a collector on the phone. That one sentence can reset the limitation period, but only if the clock hasn’t already run out. In most provinces, an acknowledgment or payment made after the limitation period has expired does not restart it.

Even a partial payment of $10 can re-age the debt and give the creditor a fresh window to sue, if the limitation period is still running when you make it.

If a collector contacts you about an old debt, don’t confirm anything until you know where you stand.

You’re not alone in finding this confusing. Talk to a trustee first. The consultation is free, and it won’t re-age any of your debts.