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What happens if I dont declare bankruptcy?

I just wondering if I dont declare bankruptcy, my credit would be clear after 7 years or I have to declare bankruptcy in order my credit goes back to normal after 7 years.

Posted from: Ontario

One Response to “What happens if I dont declare bankruptcy?”

A licensed trustee said...

From a legal perspective, there is no statute of limitations on the debts that you owe – they don’t go away with the passage of time.

There is a law in Ontario called the Limitations Act which states, if you haven’t made a payment on a debt and the creditor has not commenced legal action against you in two years then the creditor loses the right to compell payment. The debt doesn’t go away, but the creditor can no longer force you to pay.

The 7 year myth has something to do with your credit report. Bad debts may be displayed on your credit report for up to 7 years from the last time it is reported. This means that your credit report will clean itself up 7 years after your creditors stop reporting on a debt.