Free Consultation

Statute barred

Is it wise to go into a consumer proposal to stop ONE garnishment when all the other creditors on the credit bureau file are not calling anymore and they are waaay over the statute of limitation so they can not sue anyway…I was told ALL the creditors on the file had to be included. Is this true?

What would happen to these older debts that normally would just fall off in 2 or 3 years. Would a proposal restart the clock on the credit report? How does that work?
I keep reading that the proposal stays on for 3 years after you finish paying? But my debt would have been gone off the report BEFORE THAT…wouldn’t that hurt my rating longer?

And what happens if a creditor didn’t bother to report anything on the credit report of a spouse that had a joint debt that was in arrears.. but this spouse was not filing a proposal while the other spouse was. Could the creditor start to report to the credit bureau of the spouse that was not affected if the other spouse did a consumer proposal?

Just wondering.

Posted from: Alberta

One Response to “Statute barred”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

The statute of limitations can be a tricky piece of legislation to understand. If you are concerned that it may impact your situation you are best to contact a lawyer who deals with this legislation regularly to verify whether or not it applies to the creditors are dealing with.

In terms of the rest of your questions, the result of filing a consumer proposal is that you will have an R7 listed for 3 years from the date that the proposal is completed. This is for any debt listed in the proposal, so it makes no difference when the debts would have fallen off, they will be subject to the R7 for 3 years.

In terms of creditors not reporting anything to the credit bureau, this really doesn’t mean anything. No one is required to report to the credit bureau and failure to do so doesn’t mean you aren’t responsible for that debt or that the debt shouldn’t be listed in your proposal. So in your example, if it is a joint debt, the creditor in question would retain the right to register a comment at the credit bureau with or without the filing of a consumer proposal. So the spouse who was listed joint would likely have their credit affected in either situation.