There are only a few things which are worse than getting sucked into a debt hole. The debt piles up, you don’t just have the financial resources to pay it and in turn, it increases because of interests and fines.
However, all hope is not lost. It is possible that you can get rid of that outstanding amount. No doubt, it is rare since the debt rules in Canada are made by the creditors; however, in certain situations your outstanding debt can be forfeited.
- The Limitation Period on the Non-Judgment Debt has Expired or it has dropped of the credit report
There is an stipulation time period for an debt to be collected. So sometimes because there is no activity happening, the debt just drops off the credit record. This could also happen in an undischarged Bankruptcy. Recently, I had a client who had filed Bankruptcy in 1992, but was never discharged. But after some time the Bankruptcy dropped of their credit report. After that he got a mortgage, credit cards and line of credit. So if it has dropped of the credit record, you may not be required to pay them.
- Your Creditor might not be able to Prove the Debt
If your creditor is unable to prove that you owe the debt, you can get away with it. Such a scenario could occur because the creditor is lazy to dig up documentation on the debt and this works in your favour.
- Creditor Doesn’t Think You Can Pay
The amount you owe may be very less. In such a case, debtor may consider letting you off the hook. This is quite possible if you don’t have any income support and don’t have any assets. The creditor will come to the conclusion that it’s futile to take you to court.
- Unable to Enforce the Court Judgment
Even if you get dragged to court, there is no guarantee that the creditor will be able to enforce the judgment.
Such situations are rare where you manage to escape debt. This works for consumer debt and not government debt. The onus is on us to prove and collect documents to show that when the last payment was made or even written acknowledgement was done. If you are not worried about credit for a very long time, then the above might work.
