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Difference between revisions of "Introduction to Debtors' Options (10:IV)"
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Introduction to Debtors' Options (10:IV) (view source)
Revision as of 05:11, 26 August 2016
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Desy Wahyuni (talk | contribs) m (Desy moved page Introduction to Debtors' Options (10:III) to Introduction to Debtors' Options (10:IV): 2016 revision) |
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Being in debt is obviously stressful for debtors. Debtors should be made aware that measures can be taken against overeager creditors. Although creditors may choose to not initiate legal action, a '''debtor should not assume that they can ignore their responsibilities.''' The debtor may try to communicate with the creditor(s) in hopes of reaching an agreement about repayment, and to avoid potentially costly legal battles. However, this is only to be done when the debtor wishes to acknowledge the debt. | Being in debt is obviously stressful for debtors. Debtors should be made aware that measures can be taken against overeager creditors. Although creditors may choose to not initiate legal action, a '''debtor should not assume that they can ignore their responsibilities.''' The debtor may try to communicate with the creditor(s) in hopes of reaching an agreement about repayment, and to avoid potentially costly legal battles. However, this is only to be done when the debtor wishes to acknowledge the debt. | ||
Under the | Under the ''Limitation Act'', SBC 2012 c. 13. a creditor generally cannot succeed in pursuing a debtor after two years from the last payment or acknowledgement of the debt. Communications with creditors that acknowledge the debt will initiate a new two year time horizon in which a creditor is able to pursue the debtor. This should be carefully considered when a debtor is approaching the end of a two year timeline in which they will be relinquished of legal responsibility for the debt at issue. Since this change to the limitation period, several major creditors have been pursuing debtors through in house collections more aggressively, rather than sending the accounts to third party agencies. The limitation change may also be leading creditors to pursue debtors in court with greater frequency. | ||
Also important to consider is if the last payment of the debt or written acknowledgment of the debt occurred before June 1, 2013, when the revised ''Limitation Act'' came into force. If this is the case, then the old legislation applies and the time period in which a creditor may pursue a debtor is six years rather than two. It is important to determine which limitation period applies. To avoid acknowledging a debt, it is important that the following phrase be included in the letter: “This communication is provided solely for the purpose of [state purpose of letter] and does not constitute an acknowledgement of the alleged debt described (above).” | Also important to consider is if the last payment of the debt or written acknowledgment of the debt occurred before June 1, 2013, when the revised ''Limitation Act'' came into force. If this is the case, then the old legislation applies and the time period in which a creditor may pursue a debtor is six years rather than two. It is important to determine which limitation period applies. To avoid acknowledging a debt, it is important that the following phrase be included in the letter: “This communication is provided solely for the purpose of [state purpose of letter] and does not constitute an acknowledgement of the alleged debt described (above).” | ||