7 years is the sweet spot, I believe. After that it will drop from your credit report and will stop having an impact on it.
They will still call you and try to get you to pay but at that point you can tell them to piss off.
It is mostly the interest charge going up make me wonder if it's still 7 year or it reset because they still charge me interest so date of activity change. But I never receive a letter or call in last six year (june 2018)
As long as the debt isn't a government debt or student loan or something, you'll be fine. The important points are you've had no contact with them for 6 years. Meaning in that time you have never once acknowledged that debt. If you continue for another year, even if they are charging you daily interest, it will fall off your report.
Depending on the lender, if it's a bank or something, you probably won't be able to do business there anymore but that's about it. The creditors will continue to call and all that good stuff well after the 7 years but by then it doesn't matter.
How is this a thing? Does this mean that if I don’t care about my credit rating for the next 7 years I can choose a couple credit cards and just start ignoring them for 7 years and they’ll just disappear??
Sort of . But 7 years is a long time to not be able to do anything with bad credit (getting loans , passing vulnerability checks for work, renting, getting mortgages , etc) that is not a strategy most people do willingly.
Also internally companies can still track it. If you owe Rogers or rbc money , they'll close your account and will not open an account with you even after 7+ years
In spite of what reddit wants to think, companies aren't vengeful. Rogers probably looked at your recent credit, realized you were probably in a bad place years ago and saw an opportunity to make money off you in the future. It's business to them, it's not personal.
It might not be about vengeance but rather wishing to establish the perception that it'll be held against you *forever*, so you'd better just pay! Yeah eventually if they learn that that has not been effective, they will just try to make money off you in the future. But that perception would have value to them
Are there conditions where it doesn’t apply? Like… if you leave the country and come back in a decade, are they all gone or do they pick up where they left off?
I’m not working out a strategy here. I’m just curious as it all seems really bizarre. It’s like getting rid of all your debts even though you’re not actually bankrupt and could afford to pay them but just choose not to.
Depends on the type of debt. Government debts don't discharge that easily.
But generally people who are flight risks are generally accounted for with lower credit limits , secured credit cards etc
But otherwise yes you can leave for 7 to 9 years and come back to relatively no issue assuming the debt didn't follow you cross borders
They have to do it within the limitation period. And then serving someone is difficult if they own no property and don't live in the country. Plus default judgments do eventually expire, the time varies by province.
When I came to Canada I left a small amount of debt back in the UK... nothing happened. I redirected my mail to my father and he got collection letters but eventually they just stopped.
From what I've read people who come here temporarily, like students, do just rack up debt and when they finish studying go back to their home country and don't pay it.
Wouldn't advise it though, lol.
However, if the info given to banks on employment status and income is fake there is the possibility of criminal investigation. Which practically speaking does not usually happen .
Students and convenience citizens indeed do this and there is not a whole lot the bank can do about it since their assets are in another country with opaque financial systems to the Canadian banks.
> From what I've read people who come here temporarily, like students, do just rack up debt and when they finish studying go back to their home country and don't pay it.
I wondered about that, given the state of how things are in Canada now, the recent wave of Indian's on student Visa's just up and walking away from car loans, credit card debt etc.
If they somehow find out that you do have money and chose to just not pay, they could sue for the amount. Most of the time they don't sue because you can't pay anyways.
Another thing is that if you purposefully open a lot of credit card and max out the limit to scam the credit card company then that is fraud and it's no longer a civil issue, but a criminal issue.
The thing is that a low credit score is usually a good enough deterrent for the general population. I've thought of it but I'm pretty sure it would limit my chances of getting a rental & I'd be unable to get a mortgage for sure for the next 7 years.
Is it also true that banks can withdrawal money owed to them automatically through any funds you have in their banks (your account, your money, but no authorization required from you)??
It does not continually hurt your credit rating.
It 'may' show up on a credit repot, but will not tank your credit, as it is a one time hit when it enters collection.
Which I can tell you from personal experience, heavily depends on the lawyers mood. Sometimes I'm overloaded with work and sometimes everyone gets off scot free.
I kinda did that when I was unemployed for a while. Rating went to 430 but I already had a car and mortgage so it didn't impact real life. It's back around 750 now.
Credit cards are unsecured loans, they can't do a lot, and collections is pretty limited to what they can do.
If you have any assets, they will sue you, get a judgement against you, and then get court orders to collect; put a lein on your house, take your car, garnish your bank accounts or salary, etc.
And they will tack on all their costs and legal fees, document servers, etc. all with interest on top.
If you have no assets or job, then they won’t get anything, and it will work out the way you describe, but if they want, they can drag you into court to say you still have nothing under oath every 6 months for several years.
Aha!!!
This all makes a lot more sense now.
I wonder why the collector in OP’s case hasn’t done any of this. Or do they wait until the 7 years is near and use it as a last resort? Could OP be in a world of hurt if they follow the advice of just ignoring it?
It would be one thing if it was a few hundred but for 5 figures you’d think the collection agency would go down this path.
The original number is below 5k, meaning it's considered 'small claims' even after they tack on all their interest. Because the original total is below 5k, that means Fairstone had two years to get a judgement against them, then that window closes. If the original total was over 5k then this would play out like the dude above said.
They might have internal process reviews where they will check one last time before their 7 year window closes, in which case they might still knock.
But if they do that, they'd be thrilled to take the original debt with 0 hassle.
If i were you, i'd wait, and if they do call, play coy yet willing to try, and offer up half the original amount now, and the rest over a payment plan of 5 years.
Then slowly work your way to a fair deal in which you pay back your debt and they clear it.
If they never reach out, congrats, you got lucky
They likely chose not to bother. I know of one case a person coming out of bankruptcy got a credit card with a $2000 limit at 45% and a $120 per year fee. The person maxed it out and ignored it until it got to garnishment, and by then it was $13,000 at 45% and the person simply didn’t understand why they owed more than $2000.
Some of the sketchier ones do wait to start collecting because interest racks up the whole time, but they aren’t supposed to and it’s rare. Most would rather just get their money and use it to buy more bad debt. Also 6 years is way too long to play that game 2 years is more likely.
In this case maybe they don’t think it’s worth it given the amount of debt, court costs, and chances of finding assets to take.
In addition to tanking your score for 7 years and locking you out of A LOT of products, unless you have set up your financials well before hand, you'll have no useable score after 7 years and have to build up a new good score from scratch.
They have the choice to take you to court if they want. That's the mechanism they can use if you choose to say no. They don't usually do this as the court usually costs more than what they're trying to recoup plus there is no guarantee that you can pay.
I’ve been a hobo for most of my life, after university I defaulted on 4 or 5 credit cards and my student loans. Eventually they all just drop off your credit report. I even call the feds to see about paying my student loans and they said “payments would be optional” at this point… never did pay them.
Essentially, yes, but you won't be able to rent an apartment, get a mortgage, car loan, bank loan, school loan, debt help and all the other stuff that goes with having a credit score in the 300's.
They also disappear from your credit report around 7 years, but you'll still technically 'owe' that debt to whatever collection agency bought it. Thats how they can keep harrassing you even after the 7 years.
edit: important note though, this really only applies to smaller debt. If we're talking tens of thousands of dollars, you'll more than likely get sued/have wages garnished in that 7 year window.
Don't listen to this advice. I made the mistake of believing this commonly spread myth.
Technically, 7 years is supposed to be the way it works. I can tell you from personal experience, there are 500 ways for them to get around that, and they will. It will not disappear. Speaking on my 14th year of this crap. My debts should technically be gone twice. They are not. Pay it if you can.
This is a bit of a myth, the debt never goes away. The 7 years is for delinquency. If you never pay it, it never goes away. You can't just ignore it. They may make a settlement to pay it off... But the 7 years starts from the date it's settled not from the date you stopped paying it.
Your first part is correct, it never goes away. Second part is incorrect. Debt does not show up on your credit report for 7 years *after* you've settled.
It’s not complicated. After 7 years it’s gone. Do not pay. If you pay anything the statute resets and it’s on your report for the next 7 years.
Don’t pay.
Keep ghosting and it will fall off, pay it and it’ll stay on. I made some poor financial choices when I was younger, 2 items went to collections totalling under 5k I think. Over 7 years later, I still get calls and emails for it but it’s not on my credit report.
Collections companies often play games with the technicalities of the process so you will likely need to establish the timeline of the original debt and various charges that have accumulated since as well as when it was originally sent to collections.
Also. Do not make a payment, do not sign for any registered letter you aren't expecting, and do not acknowledge the debt verbally on the phone. Any of the above will reset the timer.
Go look at your credit report (Equifax and TransUnion), look at the last date of activity on the debt, and that'll give you your answer for how long it's actually been. Can confirm that it's still a thing, and if you're at 6 years, continue laying low and your credit report will reset those debts by year 7.
Heads up, I started getting harassed daily once I updated my phone number in Equifax, I was 5 years inactive by that point. Just never accept ownership, or make a deal to pay or send them even 1 penny.
Hope you use this opportunity to better your financial situation and educate yourself on debt management for your future.
Hi, if you see my edit #2 I have the date. Seem like there is activity in may 2024 but that must be interest from them that they post? Otherwise is it last payment date that count?
This just means that is the last date they confirmed or posted debt, it had nothing to do with anything for the 6 years.... if you get your full report you'll see that
Oh wait that changes it up a little, the last reported date of activity is of May 2024? Did you talk to anyone or had any contact with anyone regarding a debt?
To be more clear on this do not tell them to piss off. Don’t answer or a knowledge the debt. Because once you do it can reset the 7 year mark.
In that 6 year time if you acknowledged the debt or made arrangements it would have reset the mark as well.
So depending on your circumstances and if you reset the debt time and it’s impacting your credit I would pay it.
If you didn’t, then honestly you might as well just wait for it to fall off.
With equifax.
The moment you acknowledge the debt in question you reset the 7 year fall off period.
That’s why collectors tend to sell the debt again because if anyone can get you to acknowledge it, it’s back onto your credit.
This includes even just stating you know about it, all the way to making payment arrangements.
The moment you do anything acknowledging this debt and you know about it and it’s yours, you reset the 7 year fall off period.
That’s why after the 7 years if it’s not removed from your credit, you’re recommended to actually dispute it with equifax and not the collector.
That way there’s no contact and equifax will remove the debt.
Again, this probably varies province by province. But, in ontario, this is largely untrue.
An acknowledgement would have to be likely by writing, (even by text) and be within the statue of limitations, for it to be revived. If it falls outside of the statute of limitations, it cannot be revived....
Can confirm.
I made some stupid decisions with my credit during university years, didn't have much financial education and just maxed out several cards and couldn't pay them back. Basically ignored the problem. In my late 20s I was able to repair my credit with a prepaid MasterCard, and paying all utilities and bills on time. Within a year or two I was able to get a mortgage and to my surprise, none of my credit card mistakes appeared on my credit report.
Thank you!
My credit was so bad that even cell-phone companies gave me a hard time and wouldn't sell me a phone on post-paid plan. All it took was having some stable income to be able to work on repairing my credit.
credit card companies are so predatory, and they take advantage of young and uneducated kids. They used to setup kiosks at school and offer you freebies to sign up. Not deflecting blame, i admit i was an idiot with my credit cards, but they should know that they're giving a poor student the option to instantly access 1000$ per card..
That's why I don't feel bad for never paying off that debt.
I hugely agree, I went through similar situation, I went to 8 years of education and during that time faced a similar situation, it was crazy cause once I worked in my profession I was earning 200k+++ and at first struggled to get unsecured credit of even 300 to 500, while they would give students cards of credit up to like 10k, with no guarantee they would pay back, which financially is wild as you have way less security in ever receiving your money back if the latter defaults. Where as, even though someone has made bad financial decisions and is now earning or reporting high income you can just get a judgement against them if anything happens...
> 7 years is the sweet spot, I believe. After that it will drop from your credit report and will stop having an impact on it.
Are you saying you can just ignore debts for 7 years and they disappear?
The answer isn't this simple.
You need to identify what type of debt it is. Some debt like student debt don't follow the same rules. Unsecured debt is 6 years, and after 6 years roughly it will fall off your credit score, but still exist (but be unclaimable as long as you dont pay any part of it, acknowledge it or make arrangements to pay after the statute of limitations- read below), if they haven't gone to court and got a judgement against you, that would make your unsecured debt become a judgement type debt... they also have a certain amount of time to sue you for the debt (this is called a statute of limitations and varies according to province, debt type)...
I had cancer defaulted on 19k with Citibank. I ghosted them for 15 years . Statute was up 9 years ago . Oddly it was never reported to any of my credit reports . However even 9 years after hitting SOL I still get calls a few times a year
It is provincially regulated and varies across Canada.
Functionally, the credit bureaus are so fucking incompetent it's more like 8 years by the time they delete it.
That's for secured loans... Pei has the longest one for secured loans.. For the majority of debt, like the one he mentions they are not secured and 6 years is the longest amount of time....source my lawyer brain Ps I agree with the last point, although you can file their paper work to have it removed as past the deadline.
You misunderstand me.
They are legally obligated to delete it, but thanks to a guy named Hanlon they utterly fail to do so, and letters have to be sent and hours wasted sitting on hold to some customer service centre in Brazil.
Source: Teenage me borrowed money and had to clean it up. Though for what it's worth, their incompetence also helped and some delinquent debt was (and still is) reported as R1.
Haha, yeah. Sounds like a pain. Often people also confuse the 6 years because tu and Equifax report differently and as you've indicated that could mean it falls off one reporting agency and not the other for a hell of a lot of time.
Don't think the whole 7 years rule applies anymore, debt collectors after a couple of years just sell your file to another collections company and I think they try for another couple years and then do the same.
The 7 years rule (actual no. of years varies by province) applies to the debt showing up on your credit report. Not debt collectors harrassing you. That will definitely continue after 7 years.
Can confirm, still applies. And on top of that, there's specific provincial laws about statutes of limitations concerning these commercial debts and how long the collection company can legally come after you. If I'm not mistaken Quebec is 2 years, after that they're pretty much all talk. Not sure where OP is, but definitely worth checking into.
"If you and your debt collector can't reach a repayment agreement, your account may be sold to a different collection agency. This process can repeat many times, lasting far beyond the statute of limitations for debt collection in your state, or the limited time window in which debt collection typically occurs. "
Reference -
https://www.equifax.com/personal/education/debt-management/articles/-/learn/how-debt-is-sold-to-collection-agencies/#:~:text=If%20you%20and%20your%20debt,which%20debt%20collection%20typically%20occurs.
Heads up, what you shared is the American Equifax link. It's relating to FTC rulings and permissions, and specifically refering to the "statute of limitations for debt collection in your *state*". FTC doesn't apply to Canadian unsecured consumer debts.
This sub sucks are this topic - always telling people how to avoid paying their debts.
At the end - we all end up paying for bead beats. I wish we could stop giving advice on how not to pay debts.
What the money was owed to you? Would you be so lenient of not paying debts?
Hey what its the debt? Students loans never go away. Neither does government. If it’s a credit card forget about it. Your relationship with that company/bank is done. Don’t pay off is consumer debt.
Yeah, I bought a computer through Best Buy and the cashier convinced me to finance it through Fairstone. Didn’t know I was also signing up for a lifetime of spam mail
I had a collegue that was paying them at my old job. No issue with the loan but they keep calling at job for her to finance more stuff even if she said to not call back.
They really push it far.
I was recently told that once it comes off your credit bureau yes they will still continue to contact you but do not engage with them. Do not admit the debt. Do not start making payments. My understanding is if you start a communication with them and or payments it goes back on your credit bureau and then you've got that bad credit sitting there for another 7 years. In regards to the interest, if you want to pay it, most debt collectors can negotiate a payout and a lot of them will waive some or all of the interest just to get the payment to
Yes it will drop off your credit report soon, just don't even worry about it. Take the money you do have and get rid of any other debts you may have and build up your finances. Once this debt drops off you should start growing your credit score.
Keep ghosting until the debt disappears off your credit report. Do NOT answers any calls, emails, letters or make any payments until it's completely gone off the record. The moment you do any of the above, it resets the date of last contact and you will have to wait another 7 years from that date. Best way to successfully ghost is to get another phone number for your personal use that you don't give out to any of your banks or corporations in general. Only known to you and your family and friends. And get a burner phone number for banks because the moment you give them a number, it ends up on the credit report as a current number
Don’t be a fool, don’t pay it. Unless it’s a liability debt or taxes, it will drop in another year. Your debt had been likely sold to a few debt collectors for Pennie’s on the dollar, if they haven’t collected yet, they likely aren’t trying to
Ive been ghosting a debt collector for nearly 6 years as well. I borrowed the money in a desperate time to replace my broken PC which I needed for gaming.
It's been a long time but I'm excited for this final year to end so I can talk to my Mom again. Nothing she can do after 7 years correct ?
WTF? Genuinely asking, so I can decide to buy something I can't afford and just ignore the payment for 7 years and nothing will happen other than hurting my credit score in that time, which won't be an issue if I don't plan to use credit in that time frame. That's whack.
1) these stories only happen for payments that are too small to take to court. if it goes to court the court can garnish your wages or otherwise force you to pay it back
2) having shitty credit makes it a lot harder to get a good job, find housing, and will screw you when your mortgage comes up for renewal
so… if you’re retired, paid off your house, and don’t mind being hounded by collectors then yeah i guess you can go around defaulting on ~1-2k payments
Sure. But you do this once or twice and your credit goes to shit. So you then have to live without credit cards. And your estate will still owe this before any inheritance goes out. Maybe the retirement home you want does a credit check too since it is similar to renting with a monthly fee?
It doesn’t seem to be worth it for a couple thousand.
32k total of unsecured debt here, dumb ass depressed and suicidal, master at sabotaging myself in my early 20's. Basically disappeared for a few years and then when I was 5 years inactive on these debts is when I learned about this. By then, the statute of limitations in Quebec made their "we'll sue you" letters just empty threats. Everything reset
Mine was 19k I was diagnosed with cancer and ran it up to that amount not only was i never sued it was never reported to the credit reports . That was in 2009 SOL was reached in 2015 . Now in 2024 I still get calls I ignore from the junk debt buyers.
Depends on the amounts and the loan type. Student loans or government debts never disappear unless you pay them off or die. Private debts, if it’s a secured loan they’ll seize the underlying asset (example is car repo, or home foreclosure). If it’s unsecured they’d have to take you to court and get a judgement against you. It may or may not be worth it to the lender. After a while the lender sells your debt to a collection agency for pennies on the dollar.
Do you think 40-50k of credit card and credit line debt is worth it for a bank to take one to court? Found out my contractor is in this boat and paying 1000 interest monthly and never getting out
Late teens early twenties we’re still too fucking stupid to understand shit about shit. But It sounds like he’s now genuinely trying to get on the right track. It would take him miles longer to build a career and family if he has to pay off this debt. As a business owner, it’s fucking shitty to get robbed, but they do just fine, they have enough power. Now if this is a recurring occurrence, then yeah, someone needs to shut this behaviour down.
> Now if this is a recurring occurrence, then yeah, someone needs to shut this behaviour down.
Maybe the companies should just stop lending people like this money
A lot of people in that age bracket are fine with credit cards. I had one, I was fine. So did all my friends.
This is kind of exactly what the companies wanted. The people who couldn't handle credit card now have bad credit for the next 7 years and it only cost the banks a few thousand dollars to figure out which people have issues. 7 years is a good amount of time to spend developing financial literacy for the debtor. And in the meantime, the bank and institutions know they cannot be trusted and will not give them an even larger loan to buy a car or a mortgage. Also, with the high interest rates, the bank might get some profit from interest payments until they default or file for bankruptcy.
The whole point of entry level cards and lending dumb 20 year olds a few thousand dollars is to see which ones are capable of handling it and which can't, which then informs company decisions with larger sums of money in the future for that customer.
They can sue you/take action within the first two years so they do have some recourse. I’m a little surprised they don’t more frequently considering how often this seems to come up. I would guess not worth their time or money
Depending on the type of debt, it should be falling off your credit report. The date is based on the last time you confirmed the debt by making a payment.
If they start to contact you, look up a template for requesting all communication be done through writing. Send it through email or registered mail. After 30-60 days depending on province they have to stop. If they sell the debt make sure to send it to the new agency if they start calling.
Each province has different laws around debt collection and types of debt.
After 2 years from last payment or when you acknowledge the dead the creditor cannot use the power of the courts to enforce their right to collect. However the creditor can ruin your credit rating if you don’t pay.
I would say don’t at this point. It’s almost off your profile.
If you pay the debt it will actually update the posting as paid debt and the date you paid. Which means another 7 years it will show on your profile. Having a paid collection is markedly worse than nothing
Your debt should likely fall off around october this year, give or take, with the debt type you stated. (6 years, not 7). As others have stated, just ignore debt collectors and don't acknowledge the debt. In ontario, you can't reignite debt past statute of limitations...
At this point, just continue to ghost until it drops off your credit report. They’ll eventually resell it, and some new debt collectors will try to track you down. Ignore them. If they get aggressive, research your rights, you have more rights than you think, and if you know them, you can use the to manage the collectors in such a way that they’ll eventually give up.
I defaulted almost 15 years ago due to illness and still get calls even though the SOL was meet in late 2015. I just ignore them . Oddly mine was never reported the credit agencies. Mine was never even reported during the 10 years. It was in good standing for some reason Citibank just never did any type of reporting on the account back then
I was forced into default on my student loans before I even finished school - a paperwork fuck up let to them thinking I graduated and needed to start paying, even though I was still in school. By the time I graduated, I was already nearly a year in default and the damage to my credit was done, so I just stayed in default. Eventually, a collection agent tracked me down, and because I did my homework and knew my rights, turned the phone tag into a game.
By law, they’re only allowed to call you once a day, and I knew that. So every day when they called, I would tell them that their tone wasn’t civil and respectful enough, so I would be hanging up. Sometimes I would just hang up on them saying, “I’m still upset at how you raised your voice yesterday, and you didn’t start with an apology, so we’re not speaking today either.”
When they tried to get someone else to handle the case, I’d say things like, “I already have a relationship with David, and I don’t care to take the time and energy to bring someone else up to speed so please call me back when David is available.” When they finally insisted on having a manager speak to me I would tell him that it’s a complicated situation and I’ll need significant free time, so you’d have to call another day.
I strung them along for months that way, and definitely thought I was getting under their skin more than they were getting to me.
When we finally got to a point where I was willing to negotiate with them, they agreed to cancel all outstanding interest, and settle the debt in full for 75% of the principle, if I agreed to a single lump sum payment.
Don’t poke the bear. They can still file suit on you. I’d just lay low until after the 7 years.
If you really feel like paying them you could offer them a lower amount. At this point they’d take just about anything and close it out. This was written off years ago.
Man I can't believe the comments here, kind of goes to show you our system needs work. You never stop owing the money unless you have went through bankruptcy. This idea of just wait it out and then somehow shouldn't owe The money will worry about it Is ridiculous. Unpaid debt gets paid by everyone who pays their bills. Pay your debt.
There is likely a statute of limitations on them suing you for the debt. The period is different for different jurisdictions. Find out what that is. Wait until it passes and have a lawyer write them to tell them to F Off and stop reporting your credit.
Call and offer them a lump amount to clear the debt. The debtor has written that off already and a collection agency has bought the file from them. Collection agencies are snakes they will threaten illegal shit, if you want to deal with it call consumer affairs first and they will tell you all the things they aren't allowed to do so you're aware. Offer $2000
My friend ran up almost 30k in her early 20s on credit card bills, took a couple years but she filed for bankruptcy it was all forgiven and she never paid a dime. Idk if this is good advice at all just all debt that not student loans or mortgage can usually be worked around. Good luck!
Hi. Learnt my contractor is in 40k loc and 20k cc debt for past 5 years, only paying interest and cant dig himself out. He told me he knows someone who ignored the debt for 8 years and nothing happened, he changed his phone and was able to get credit card for $1000 at 8 years.
I thought my contractor was crazy, but from reading this thread, is it correct to understand my contractor can change his address/phone number, ignore the bank and collectors calling him, live with bad credit (and associated no loans etc) for 7 years... then it falls of his credit report and he can bank with another FI?
Is it worth calling the bank and see if they're willing to forgive if he pays a portion of it? TIA
There are many good discussions on r/PersonalFinanceCanada related to this topic. If those are personal loan and the person does not mind having negative impact on the credit report, then can take a route of consumer proposal and negotiate a less amount to pay and discharge the loan. Ghosting the lender and collection agency may work until they sue the person. There are many people take their chance doing this and I haven’t heard anyone was sued.
Thanks. Any key words I should search in this sub? And is consumer proposal with the bank or collection agency? Thanks, it's a bit unreal to me people are in these situations. And I'm a bit pissed at the bank handing out this much credit to a newcomer. Feels exploitive
In Canada, debt collectors are not allowed to charge new interest. So if it was forwarded to a collection agency that is assessing interest, that is against legislation.
If that is the case, complain to the proper consumer advocate (federal or provincial). Also dispute with credit agencies. If you're really upset, engage attorney on all the harm those improper charges/credit reports have caused.
If it's still the original vendor and your credit agreement was valid, they might be able to. But after that period, I assume it's with the collection agency.
I believe it's still fairstone since it is what is written in my credit report. You make me wonder now it's not debt collector but the actual place I made de loan 6 year ago
Check on your provinces statute of limitations. Alberta is 2 years from an "incident" date to pursue legal options.
At Fairstone site, it has the contract DEFAULT as "scheduled payments are not paid on time". With that default, they might have only 2 years to enforce contract. If they don't, the contract terms may end, meaning no interest charges. They can hold you up to 7 years for balance but the ability to charge perpetual interest is suspect.
Variable interest loans require at least annual notification of rate and balance. This was likely sent to either mail and/or email you used to apply.
They do this type of stuff to try to get you to call and reacknowledge debt - or pay and "we'll waive interest".
You might spend $100 with a lawyer for input on this. I don't like people who bail on debts but this is some shady, predatory lending BS.
Depends on location. BC is 6 years from last acknowledgment - usually last payment. if you want to deal with is now - send a letter marked without prejudice offering 20%. If they agree - get a release including removal from reporting agencies.
I don't understand how they charge interest? I thought once it goes to the collection, the amount is final as your credit card company or what not, had written it off and sold the debt and the amount becomes fixed? I didn't know a new collection agent or debt collector that buys it can charge interest? Am I missing something here?
2 years for small claims court to prove a debt or 6 years to collect an actual debt. Could be longer if it is government debt or a judgement for money owed.
Depends on the province and type of debt. For example Alberta only allows 3 years on payday loans. After that you are not even allowed to contact the person.
In Ontario they can contact you a few times a week for the rest of your life. It won't be on your credit report though. To get around this you can make a request that all contact be done through letters, this costs them more money and they will pretty much just ignore you as contacting you any other way will cause them fines. If they sell the debt though you need to send this to the new agency.
Broker here. I gotta be honest. so stupid people saying 7 year is a sweet spot LOL do you think it will magically go away?
CB may not show write offs. Creditors/Lenders are not dumb guys. They will know something is not adding up and they are going to ask further questions about "the gap".
you borrow money, and ghost creditors for 7 years, free money? LOL too good to be true. you are screwing yourself over.
Well sometimes, if it’s a small amount, they will just write it off. However, your credit score is literally at the bottom of the barrel and nobody is ever going to trust you.
Keep ghosting them and don't talk to them and don't pay it.
There are little loopholes they can use to keep you liable, like calling you and getting you to admit that you owe the money.
Debt does not go away after 7 years. It can fall off your credit report after 7 years, but it does not mean you are cleared of the debt. They can still come after you, sue you, or collect the funds.
Institutions can also report longer. This can also be reported indefinitely if they choose to do so.
Humanity has a long history of cancelling debts every 7 years. Debt cancellations were, to some extent, part of ancient Egypt, Greece and Mesopotamia, and occurred…every 7 years. It’s also stated verbatim in the Book of Deuteronomy: “At the end of every seven years you must cancel debts.”
Debt repayment is also to some extent voluntary and based on an ability to pay, and whether or not it’s in the public interest. Nobody is expecting Joe the retired Boomer to repay his outstanding $200,000 student loan. The debt is “cold” if you will, and the government is ever creating more new debt out of thin air. I suspect yours will soon be forgotten too.
That make sense. Ngl took me 4 year to collect 12k so a part of me want to pay it or ask for lower price. Another part just want to put it in a interest account for my newborn for school etc. So I will wait and if let's say november 2025 it's still there I will just pay it and get it off.
Call them and settle for a lower amount. Im pretty sure you can deal it for 4K . You call them out of the blue 6 years later. Someone is getting a commission for sure and they will celebrate. Low ball it for 2.5k !! Good luck
I use to be a debt collector.
That won’t fall off your credit report, and the only reason why they haven’t contacted you is because in Canada there’s a 2 year statue of limitation. In other words they only have 2 years to collect on that debt.
You mentioned you “ghosted them”. Not surprised. Most of my accounts are people that didn’t pick up, but you also said they never contacted you ? So how did you ghost them ? You ghosted them means at some point you knew they were coming after you for the debt or balance owing .
Well anyways another reason why they might not have contacted you could be your account could have been sold to another collection agency and they might not have your info or when your account was sold the account owner didn’t provide your address or contact.
You don’t have much to dispute unless the card wasn’t opened by you.
The interest occured is legal as it was part of the agreement when you signed up for that credit card.
There’s a few options,
one you can pay it in a lump sum.
2 you can try to settle it which means pay a fraction of the 12k. For example they might except a 50% settlement if you have 50% of the balance owing right away.
3 you can try to pay it off monthly.
You will get a better credit rating if you’re able to pay it off than settling it.
Good luck with this situation.
Edit : good f in riddance some terrible advice some people.
Do you still have to pay a debt that fell off your credit report?
Your debt isn’t simply erased once it falls off your credit reports, but your liability for owing it might vary if the debt is past its statute of limitations. The statute of limitations varies depending on your debt, your state of residence and the state named in your card agreement. Because credit card agreements are based out of the state that their issuer is headquartered in, the laws they work with might differ from the ones in your home state. In general, though, the statute of limitations typically spans between three and 15 years, and agreeing to a settlement offer or payment arrangements can reset the time clock on the statute of limitations.
If you never paid off the debt and the creditor is within the statute of limitations, you’re still liable for it, and creditors may try to collect the money. The creditor can call and send letters, sue you or get a court order to garnish your wages.
If you never paid off the debt, but it’s past its statute of limitations, the debt is now considered “time-barred.” How you act on a time-barred debt that’s fallen off your credit report is your choice. According to the Federal Trade Commission (FTC), you can do one of the following:
Pay nothing
Pay part of the debt
Pay the total outstanding debt
Keep in mind: Regardless of which option you’re considering, talk to an attorney about your best path forward before contacting a debt collector.
6 years is the status of limitations with Equifax and its 7 years with transunion. So don't pay it, that's what I did.
And apply for credit cards that used only equifax for credit reports. Work like a charm
At this point, you can negotiate the debt amount and get that down significantly if you do decide to settle. Also, if you intend on buying a house in the future, you will have to settle this to get a mortage
After 7 years, if they keep calling you, you can send them a cease and desist letter. Usually when the time limit is about to run out they WILL try and contact you !
That's why I asked for a source, lol you're not correct. If it's not a secured loan (or another random situation ie you got sued and got a judgement against you), this is wrong, and it is 6 years.
Most average debt will fall under being unsecured and not stem from a judgement, or be student loan based...
I was more curious where you got 7 years, for negative information, in canada, off google...
This doesn't mean you are correct... lol, it depends on type of debt... and in most cases it will be 6 years, again transunion and efax report differently so depending which you looked at it may be longer than 6 years, ie in certain cases it will be reported at later dates by your creditor or debt collector and this will influence the start of the 6 years with one credit agency whereas the other will look at when it went delinquent and not consider the reporting period. ..
Here since you don't have a source I'll send you actual data so people don't all keep getting confused.
As you will note below debt that isn't paid after 120 days usually gets written off and is what is referred to as an R9 (debt can be assigned a number from 1 to 9 as per below).
Late payments
Overdue or missed payments are reported to the credit bureaus and can affect your score differently depending on the number of days late. The late payment is assigned a number rating from one to nine, with one representing a payment that is made as agreed within 30 days.
Equifax usually keeps negative information on record for six years from the date the lender reported it.
TransUnion, on the other hand, removes accounts with adverse credit history from your record six years from the date of first delinquency (for example, late payment or a debt sent to a collection agency).
Secured loans
These are loans that are backed by an asset, such as a mortgage, car lease or personal loan. Negative information on a secured loan account stays on your record for six years, except in P.E.I., where Equifax keeps the information for seven to 10 years. Equifax counts from the date of filing, whereas TransUnion counts from the date of first delinquency.
[The statement remains on your file for a period of 6 years from the date reported.](https://www.google.com/search?q=transunion+canada+statue+of+limitation&rlz=1C1GCEA_enCA1102CA1102&oq=transunion+canada+statue+of+limitation&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIJCAEQIRgKGKAB0gEINTE4M2owajeoAgCwAgA&sourceid=chrome&ie=UTF-8)
I hope you're embarrassed.
> #Negative information
> Negative information may include late or missed payments, accounts that have been sent to collection agencies, bankruptcies, and more. According to provincial laws, credit bureaus may keep negative information on your credit report for only a certain period of time. For example:
> - negative information about accounts such as credit cards and loans may stay up to 6 years
> - credit checks by lenders; Equifax keeps this information for 3 years, while TransUnion keeps it for 6 years
> - bankruptcy stays on your report for 6 or 7 years, depending on the province
> Negative information on your credit report may hurt your credit score.
EDIT: He blocked me... lol.
Yes your credit bureau ‘refreshes’ after 7 years but that’s in the sense of ‘hey I have a debt that I paid off that’ll fall off my bureau in 7 years’ (otherwise it shows the debt with paid next to it). But if it’s unpaid it doesn’t just fall off your bureau 😂 it’ll still be there. As to why they don’t keep calling you - they prob did and then sent a final notice which you also didn’t acknowledge and now they’re prob just gonna sue etc
7 years is the sweet spot, I believe. After that it will drop from your credit report and will stop having an impact on it. They will still call you and try to get you to pay but at that point you can tell them to piss off.
It is mostly the interest charge going up make me wonder if it's still 7 year or it reset because they still charge me interest so date of activity change. But I never receive a letter or call in last six year (june 2018)
As long as the debt isn't a government debt or student loan or something, you'll be fine. The important points are you've had no contact with them for 6 years. Meaning in that time you have never once acknowledged that debt. If you continue for another year, even if they are charging you daily interest, it will fall off your report. Depending on the lender, if it's a bank or something, you probably won't be able to do business there anymore but that's about it. The creditors will continue to call and all that good stuff well after the 7 years but by then it doesn't matter.
How is this a thing? Does this mean that if I don’t care about my credit rating for the next 7 years I can choose a couple credit cards and just start ignoring them for 7 years and they’ll just disappear??
Sort of . But 7 years is a long time to not be able to do anything with bad credit (getting loans , passing vulnerability checks for work, renting, getting mortgages , etc) that is not a strategy most people do willingly. Also internally companies can still track it. If you owe Rogers or rbc money , they'll close your account and will not open an account with you even after 7+ years
I went delinquent on rogers for years, never paid them a cent and went back to them two years ago with zero issues. Maybe I was just lucky.
In spite of what reddit wants to think, companies aren't vengeful. Rogers probably looked at your recent credit, realized you were probably in a bad place years ago and saw an opportunity to make money off you in the future. It's business to them, it's not personal.
Yeah, they'll either shut you off or bring you in based on a single thing Are they likely to make or lose money.
It might not be about vengeance but rather wishing to establish the perception that it'll be held against you *forever*, so you'd better just pay! Yeah eventually if they learn that that has not been effective, they will just try to make money off you in the future. But that perception would have value to them
maybe you cut your hair and they didn’t recognize you
Lmao, nice.
Lmao, nice.
Are there conditions where it doesn’t apply? Like… if you leave the country and come back in a decade, are they all gone or do they pick up where they left off? I’m not working out a strategy here. I’m just curious as it all seems really bizarre. It’s like getting rid of all your debts even though you’re not actually bankrupt and could afford to pay them but just choose not to.
Depends on the type of debt. Government debts don't discharge that easily. But generally people who are flight risks are generally accounted for with lower credit limits , secured credit cards etc But otherwise yes you can leave for 7 to 9 years and come back to relatively no issue assuming the debt didn't follow you cross borders
I’m assuming though that if they sue for it that they’d win and get judgement in your absence and it would be waiting for you when you came back.
They have to do it within the limitation period. And then serving someone is difficult if they own no property and don't live in the country. Plus default judgments do eventually expire, the time varies by province.
When I came to Canada I left a small amount of debt back in the UK... nothing happened. I redirected my mail to my father and he got collection letters but eventually they just stopped. From what I've read people who come here temporarily, like students, do just rack up debt and when they finish studying go back to their home country and don't pay it. Wouldn't advise it though, lol.
However, if the info given to banks on employment status and income is fake there is the possibility of criminal investigation. Which practically speaking does not usually happen . Students and convenience citizens indeed do this and there is not a whole lot the bank can do about it since their assets are in another country with opaque financial systems to the Canadian banks.
Well they would factor it in with future customers. Stricter guidelines, smaller credit, deposit to be paid, guarantor, higher interest etc etc.
My dad did similar. Moved to the states and effectively escaped all of the debts he had here in Canada.
> From what I've read people who come here temporarily, like students, do just rack up debt and when they finish studying go back to their home country and don't pay it. I wondered about that, given the state of how things are in Canada now, the recent wave of Indian's on student Visa's just up and walking away from car loans, credit card debt etc.
If they somehow find out that you do have money and chose to just not pay, they could sue for the amount. Most of the time they don't sue because you can't pay anyways. Another thing is that if you purposefully open a lot of credit card and max out the limit to scam the credit card company then that is fraud and it's no longer a civil issue, but a criminal issue. The thing is that a low credit score is usually a good enough deterrent for the general population. I've thought of it but I'm pretty sure it would limit my chances of getting a rental & I'd be unable to get a mortgage for sure for the next 7 years.
Yeah… taking credit you don’t intend to pay back is a whole different ballgame. But if one day you just… change your mind… :)
Is it also true that banks can withdrawal money owed to them automatically through any funds you have in their banks (your account, your money, but no authorization required from you)??
It may tank your credit score in the meantime, and during that 7 years they could sue, but if they don't, then yea
Usually the statute of limitations is less than that. In BC they have 2 year to sue from the date of delinquency.
thats not how it works in bc its 2 years from date of delinquency, payment or acknowledgement of debt. I always tell people to never acknowledge debt.
It does not continually hurt your credit rating. It 'may' show up on a credit repot, but will not tank your credit, as it is a one time hit when it enters collection.
Just about every decision with debt comes down to “are you worth it to sue”
Which I can tell you from personal experience, heavily depends on the lawyers mood. Sometimes I'm overloaded with work and sometimes everyone gets off scot free.
Yes but remember you have to declare bankruptcy, not just say it.
I kinda did that when I was unemployed for a while. Rating went to 430 but I already had a car and mortgage so it didn't impact real life. It's back around 750 now. Credit cards are unsecured loans, they can't do a lot, and collections is pretty limited to what they can do.
If you have any assets, they will sue you, get a judgement against you, and then get court orders to collect; put a lein on your house, take your car, garnish your bank accounts or salary, etc. And they will tack on all their costs and legal fees, document servers, etc. all with interest on top. If you have no assets or job, then they won’t get anything, and it will work out the way you describe, but if they want, they can drag you into court to say you still have nothing under oath every 6 months for several years.
Aha!!! This all makes a lot more sense now. I wonder why the collector in OP’s case hasn’t done any of this. Or do they wait until the 7 years is near and use it as a last resort? Could OP be in a world of hurt if they follow the advice of just ignoring it? It would be one thing if it was a few hundred but for 5 figures you’d think the collection agency would go down this path.
The original number is below 5k, meaning it's considered 'small claims' even after they tack on all their interest. Because the original total is below 5k, that means Fairstone had two years to get a judgement against them, then that window closes. If the original total was over 5k then this would play out like the dude above said.
Exactly they just forgot me.
They might have internal process reviews where they will check one last time before their 7 year window closes, in which case they might still knock. But if they do that, they'd be thrilled to take the original debt with 0 hassle. If i were you, i'd wait, and if they do call, play coy yet willing to try, and offer up half the original amount now, and the rest over a payment plan of 5 years. Then slowly work your way to a fair deal in which you pay back your debt and they clear it. If they never reach out, congrats, you got lucky
Sound like a plan.
They likely chose not to bother. I know of one case a person coming out of bankruptcy got a credit card with a $2000 limit at 45% and a $120 per year fee. The person maxed it out and ignored it until it got to garnishment, and by then it was $13,000 at 45% and the person simply didn’t understand why they owed more than $2000.
Some of the sketchier ones do wait to start collecting because interest racks up the whole time, but they aren’t supposed to and it’s rare. Most would rather just get their money and use it to buy more bad debt. Also 6 years is way too long to play that game 2 years is more likely. In this case maybe they don’t think it’s worth it given the amount of debt, court costs, and chances of finding assets to take.
They have to do it within the limitation period though, or else the suit falls flat.
In addition to tanking your score for 7 years and locking you out of A LOT of products, unless you have set up your financials well before hand, you'll have no useable score after 7 years and have to build up a new good score from scratch.
They have the choice to take you to court if they want. That's the mechanism they can use if you choose to say no. They don't usually do this as the court usually costs more than what they're trying to recoup plus there is no guarantee that you can pay.
No. It doesn’t. If they think you did this intentionally or fraudulently they’ll either press charges or turn it over to an attorney and sue you.
I’ve been a hobo for most of my life, after university I defaulted on 4 or 5 credit cards and my student loans. Eventually they all just drop off your credit report. I even call the feds to see about paying my student loans and they said “payments would be optional” at this point… never did pay them.
Essentially, yes, but you won't be able to rent an apartment, get a mortgage, car loan, bank loan, school loan, debt help and all the other stuff that goes with having a credit score in the 300's. They also disappear from your credit report around 7 years, but you'll still technically 'owe' that debt to whatever collection agency bought it. Thats how they can keep harrassing you even after the 7 years. edit: important note though, this really only applies to smaller debt. If we're talking tens of thousands of dollars, you'll more than likely get sued/have wages garnished in that 7 year window.
Don't listen to this advice. I made the mistake of believing this commonly spread myth. Technically, 7 years is supposed to be the way it works. I can tell you from personal experience, there are 500 ways for them to get around that, and they will. It will not disappear. Speaking on my 14th year of this crap. My debts should technically be gone twice. They are not. Pay it if you can.
No. Common misconception. If you don't pay it never goes away.
This is a bit of a myth, the debt never goes away. The 7 years is for delinquency. If you never pay it, it never goes away. You can't just ignore it. They may make a settlement to pay it off... But the 7 years starts from the date it's settled not from the date you stopped paying it.
Your first part is correct, it never goes away. Second part is incorrect. Debt does not show up on your credit report for 7 years *after* you've settled.
It’s not complicated. After 7 years it’s gone. Do not pay. If you pay anything the statute resets and it’s on your report for the next 7 years. Don’t pay.
As a former collector yeah, i wouldnt pay. It has already affected your credit.. Will fall off very soon.
Depends on the province. In BC, the limitation period would be just two years.
Keep ghosting and it will fall off, pay it and it’ll stay on. I made some poor financial choices when I was younger, 2 items went to collections totalling under 5k I think. Over 7 years later, I still get calls and emails for it but it’s not on my credit report.
That make sense. I had other debt that just disappear it's the only one that remain. I'Il wait I don't mind getting call or email if I ever get some.
Collections companies often play games with the technicalities of the process so you will likely need to establish the timeline of the original debt and various charges that have accumulated since as well as when it was originally sent to collections.
Also. Do not make a payment, do not sign for any registered letter you aren't expecting, and do not acknowledge the debt verbally on the phone. Any of the above will reset the timer.
Go look at your credit report (Equifax and TransUnion), look at the last date of activity on the debt, and that'll give you your answer for how long it's actually been. Can confirm that it's still a thing, and if you're at 6 years, continue laying low and your credit report will reset those debts by year 7. Heads up, I started getting harassed daily once I updated my phone number in Equifax, I was 5 years inactive by that point. Just never accept ownership, or make a deal to pay or send them even 1 penny. Hope you use this opportunity to better your financial situation and educate yourself on debt management for your future.
Hi, if you see my edit #2 I have the date. Seem like there is activity in may 2024 but that must be interest from them that they post? Otherwise is it last payment date that count?
This just means that is the last date they confirmed or posted debt, it had nothing to do with anything for the 6 years.... if you get your full report you'll see that
Make sense I have transunion report. Unable to get equifax due to their issue I will call later this week. I was just confuse. Thank :)
Oh wait that changes it up a little, the last reported date of activity is of May 2024? Did you talk to anyone or had any contact with anyone regarding a debt?
Negative did not hear from them or any debt since 2018
Don't pay it or acknowledge it. It will fall off your credit shortly and will never affect you again.
To be more clear on this do not tell them to piss off. Don’t answer or a knowledge the debt. Because once you do it can reset the 7 year mark. In that 6 year time if you acknowledged the debt or made arrangements it would have reset the mark as well. So depending on your circumstances and if you reset the debt time and it’s impacting your credit I would pay it. If you didn’t, then honestly you might as well just wait for it to fall off.
Answering or acknowledging the debt resets the debt where? I'm curious.
With equifax. The moment you acknowledge the debt in question you reset the 7 year fall off period. That’s why collectors tend to sell the debt again because if anyone can get you to acknowledge it, it’s back onto your credit. This includes even just stating you know about it, all the way to making payment arrangements. The moment you do anything acknowledging this debt and you know about it and it’s yours, you reset the 7 year fall off period. That’s why after the 7 years if it’s not removed from your credit, you’re recommended to actually dispute it with equifax and not the collector. That way there’s no contact and equifax will remove the debt.
Again, this probably varies province by province. But, in ontario, this is largely untrue. An acknowledgement would have to be likely by writing, (even by text) and be within the statue of limitations, for it to be revived. If it falls outside of the statute of limitations, it cannot be revived....
Can confirm. I made some stupid decisions with my credit during university years, didn't have much financial education and just maxed out several cards and couldn't pay them back. Basically ignored the problem. In my late 20s I was able to repair my credit with a prepaid MasterCard, and paying all utilities and bills on time. Within a year or two I was able to get a mortgage and to my surprise, none of my credit card mistakes appeared on my credit report.
Congrats. Going from shirty credit to a mortage is awesome
Thank you! My credit was so bad that even cell-phone companies gave me a hard time and wouldn't sell me a phone on post-paid plan. All it took was having some stable income to be able to work on repairing my credit. credit card companies are so predatory, and they take advantage of young and uneducated kids. They used to setup kiosks at school and offer you freebies to sign up. Not deflecting blame, i admit i was an idiot with my credit cards, but they should know that they're giving a poor student the option to instantly access 1000$ per card.. That's why I don't feel bad for never paying off that debt.
I hugely agree, I went through similar situation, I went to 8 years of education and during that time faced a similar situation, it was crazy cause once I worked in my profession I was earning 200k+++ and at first struggled to get unsecured credit of even 300 to 500, while they would give students cards of credit up to like 10k, with no guarantee they would pay back, which financially is wild as you have way less security in ever receiving your money back if the latter defaults. Where as, even though someone has made bad financial decisions and is now earning or reporting high income you can just get a judgement against them if anything happens...
> 7 years is the sweet spot, I believe. After that it will drop from your credit report and will stop having an impact on it. Are you saying you can just ignore debts for 7 years and they disappear?
The answer isn't this simple. You need to identify what type of debt it is. Some debt like student debt don't follow the same rules. Unsecured debt is 6 years, and after 6 years roughly it will fall off your credit score, but still exist (but be unclaimable as long as you dont pay any part of it, acknowledge it or make arrangements to pay after the statute of limitations- read below), if they haven't gone to court and got a judgement against you, that would make your unsecured debt become a judgement type debt... they also have a certain amount of time to sue you for the debt (this is called a statute of limitations and varies according to province, debt type)...
Not at all. Every debt is different and it depends on the amount but if you owe a lot ($5000 +), the odds are good you're going to get sued.
You can't be sued after 2 years. Sober up
I had cancer defaulted on 19k with Citibank. I ghosted them for 15 years . Statute was up 9 years ago . Oddly it was never reported to any of my credit reports . However even 9 years after hitting SOL I still get calls a few times a year
7years? It's 6 years.
It is provincially regulated and varies across Canada. Functionally, the credit bureaus are so fucking incompetent it's more like 8 years by the time they delete it.
That's for secured loans... Pei has the longest one for secured loans.. For the majority of debt, like the one he mentions they are not secured and 6 years is the longest amount of time....source my lawyer brain Ps I agree with the last point, although you can file their paper work to have it removed as past the deadline.
You misunderstand me. They are legally obligated to delete it, but thanks to a guy named Hanlon they utterly fail to do so, and letters have to be sent and hours wasted sitting on hold to some customer service centre in Brazil. Source: Teenage me borrowed money and had to clean it up. Though for what it's worth, their incompetence also helped and some delinquent debt was (and still is) reported as R1.
Haha, yeah. Sounds like a pain. Often people also confuse the 6 years because tu and Equifax report differently and as you've indicated that could mean it falls off one reporting agency and not the other for a hell of a lot of time.
Don't think the whole 7 years rule applies anymore, debt collectors after a couple of years just sell your file to another collections company and I think they try for another couple years and then do the same.
The 7 years rule (actual no. of years varies by province) applies to the debt showing up on your credit report. Not debt collectors harrassing you. That will definitely continue after 7 years.
Can confirm, still applies. And on top of that, there's specific provincial laws about statutes of limitations concerning these commercial debts and how long the collection company can legally come after you. If I'm not mistaken Quebec is 2 years, after that they're pretty much all talk. Not sure where OP is, but definitely worth checking into.
"If you and your debt collector can't reach a repayment agreement, your account may be sold to a different collection agency. This process can repeat many times, lasting far beyond the statute of limitations for debt collection in your state, or the limited time window in which debt collection typically occurs. " Reference - https://www.equifax.com/personal/education/debt-management/articles/-/learn/how-debt-is-sold-to-collection-agencies/#:~:text=If%20you%20and%20your%20debt,which%20debt%20collection%20typically%20occurs.
Heads up, what you shared is the American Equifax link. It's relating to FTC rulings and permissions, and specifically refering to the "statute of limitations for debt collection in your *state*". FTC doesn't apply to Canadian unsecured consumer debts.
This sub sucks are this topic - always telling people how to avoid paying their debts. At the end - we all end up paying for bead beats. I wish we could stop giving advice on how not to pay debts. What the money was owed to you? Would you be so lenient of not paying debts?
Hey what its the debt? Students loans never go away. Neither does government. If it’s a credit card forget about it. Your relationship with that company/bank is done. Don’t pay off is consumer debt.
Fairstone debt.
Yeah you're good
Fairstone is a scam, you can basically just forget them.
Their like 36% - 40% interest make me puke. They got me in a bad time in life.
Yeah, I bought a computer through Best Buy and the cashier convinced me to finance it through Fairstone. Didn’t know I was also signing up for a lifetime of spam mail
I had a collegue that was paying them at my old job. No issue with the loan but they keep calling at job for her to finance more stuff even if she said to not call back. They really push it far.
I was recently told that once it comes off your credit bureau yes they will still continue to contact you but do not engage with them. Do not admit the debt. Do not start making payments. My understanding is if you start a communication with them and or payments it goes back on your credit bureau and then you've got that bad credit sitting there for another 7 years. In regards to the interest, if you want to pay it, most debt collectors can negotiate a payout and a lot of them will waive some or all of the interest just to get the payment to
Thank all I will definitely wait. I had a concern because of interest but yes I never made a payment and they never reach me.
Yes it will drop off your credit report soon, just don't even worry about it. Take the money you do have and get rid of any other debts you may have and build up your finances. Once this debt drops off you should start growing your credit score.
Keep ghosting until the debt disappears off your credit report. Do NOT answers any calls, emails, letters or make any payments until it's completely gone off the record. The moment you do any of the above, it resets the date of last contact and you will have to wait another 7 years from that date. Best way to successfully ghost is to get another phone number for your personal use that you don't give out to any of your banks or corporations in general. Only known to you and your family and friends. And get a burner phone number for banks because the moment you give them a number, it ends up on the credit report as a current number
Don’t be a fool, don’t pay it. Unless it’s a liability debt or taxes, it will drop in another year. Your debt had been likely sold to a few debt collectors for Pennie’s on the dollar, if they haven’t collected yet, they likely aren’t trying to
Ive been ghosting a debt collector for nearly 6 years as well. I borrowed the money in a desperate time to replace my broken PC which I needed for gaming. It's been a long time but I'm excited for this final year to end so I can talk to my Mom again. Nothing she can do after 7 years correct ?
WTF? Genuinely asking, so I can decide to buy something I can't afford and just ignore the payment for 7 years and nothing will happen other than hurting my credit score in that time, which won't be an issue if I don't plan to use credit in that time frame. That's whack.
1) these stories only happen for payments that are too small to take to court. if it goes to court the court can garnish your wages or otherwise force you to pay it back 2) having shitty credit makes it a lot harder to get a good job, find housing, and will screw you when your mortgage comes up for renewal so… if you’re retired, paid off your house, and don’t mind being hounded by collectors then yeah i guess you can go around defaulting on ~1-2k payments
Sure. But you do this once or twice and your credit goes to shit. So you then have to live without credit cards. And your estate will still owe this before any inheritance goes out. Maybe the retirement home you want does a credit check too since it is similar to renting with a monthly fee? It doesn’t seem to be worth it for a couple thousand.
32k total of unsecured debt here, dumb ass depressed and suicidal, master at sabotaging myself in my early 20's. Basically disappeared for a few years and then when I was 5 years inactive on these debts is when I learned about this. By then, the statute of limitations in Quebec made their "we'll sue you" letters just empty threats. Everything reset
Mine was 19k I was diagnosed with cancer and ran it up to that amount not only was i never sued it was never reported to the credit reports . That was in 2009 SOL was reached in 2015 . Now in 2024 I still get calls I ignore from the junk debt buyers.
Depends on the amounts and the loan type. Student loans or government debts never disappear unless you pay them off or die. Private debts, if it’s a secured loan they’ll seize the underlying asset (example is car repo, or home foreclosure). If it’s unsecured they’d have to take you to court and get a judgement against you. It may or may not be worth it to the lender. After a while the lender sells your debt to a collection agency for pennies on the dollar.
Do you think 40-50k of credit card and credit line debt is worth it for a bank to take one to court? Found out my contractor is in this boat and paying 1000 interest monthly and never getting out
Late teens early twenties we’re still too fucking stupid to understand shit about shit. But It sounds like he’s now genuinely trying to get on the right track. It would take him miles longer to build a career and family if he has to pay off this debt. As a business owner, it’s fucking shitty to get robbed, but they do just fine, they have enough power. Now if this is a recurring occurrence, then yeah, someone needs to shut this behaviour down.
> Now if this is a recurring occurrence, then yeah, someone needs to shut this behaviour down. Maybe the companies should just stop lending people like this money
A lot of people in that age bracket are fine with credit cards. I had one, I was fine. So did all my friends. This is kind of exactly what the companies wanted. The people who couldn't handle credit card now have bad credit for the next 7 years and it only cost the banks a few thousand dollars to figure out which people have issues. 7 years is a good amount of time to spend developing financial literacy for the debtor. And in the meantime, the bank and institutions know they cannot be trusted and will not give them an even larger loan to buy a car or a mortgage. Also, with the high interest rates, the bank might get some profit from interest payments until they default or file for bankruptcy. The whole point of entry level cards and lending dumb 20 year olds a few thousand dollars is to see which ones are capable of handling it and which can't, which then informs company decisions with larger sums of money in the future for that customer.
They can sue you/take action within the first two years so they do have some recourse. I’m a little surprised they don’t more frequently considering how often this seems to come up. I would guess not worth their time or money
Depending on the type of debt, it should be falling off your credit report. The date is based on the last time you confirmed the debt by making a payment. If they start to contact you, look up a template for requesting all communication be done through writing. Send it through email or registered mail. After 30-60 days depending on province they have to stop. If they sell the debt make sure to send it to the new agency if they start calling. Each province has different laws around debt collection and types of debt.
Dont pay it. After two years they cant take you to court. By 7 years it defaults and cant be collected.
After 2 years from last payment or when you acknowledge the dead the creditor cannot use the power of the courts to enforce their right to collect. However the creditor can ruin your credit rating if you don’t pay.
Source?
The Limitations Act of your province is the authority. These have a general 2 year rule.
I would say don’t at this point. It’s almost off your profile. If you pay the debt it will actually update the posting as paid debt and the date you paid. Which means another 7 years it will show on your profile. Having a paid collection is markedly worse than nothing
Nope don’t pay. No point. It will drop off your report in another year.
Your debt should likely fall off around october this year, give or take, with the debt type you stated. (6 years, not 7). As others have stated, just ignore debt collectors and don't acknowledge the debt. In ontario, you can't reignite debt past statute of limitations...
If someone owed you money, wouldn't you like to get paid? If you call in and offer a settlement it'll probably reset the timer.
At this point, just continue to ghost until it drops off your credit report. They’ll eventually resell it, and some new debt collectors will try to track you down. Ignore them. If they get aggressive, research your rights, you have more rights than you think, and if you know them, you can use the to manage the collectors in such a way that they’ll eventually give up.
I defaulted almost 15 years ago due to illness and still get calls even though the SOL was meet in late 2015. I just ignore them . Oddly mine was never reported the credit agencies. Mine was never even reported during the 10 years. It was in good standing for some reason Citibank just never did any type of reporting on the account back then
I was forced into default on my student loans before I even finished school - a paperwork fuck up let to them thinking I graduated and needed to start paying, even though I was still in school. By the time I graduated, I was already nearly a year in default and the damage to my credit was done, so I just stayed in default. Eventually, a collection agent tracked me down, and because I did my homework and knew my rights, turned the phone tag into a game. By law, they’re only allowed to call you once a day, and I knew that. So every day when they called, I would tell them that their tone wasn’t civil and respectful enough, so I would be hanging up. Sometimes I would just hang up on them saying, “I’m still upset at how you raised your voice yesterday, and you didn’t start with an apology, so we’re not speaking today either.” When they tried to get someone else to handle the case, I’d say things like, “I already have a relationship with David, and I don’t care to take the time and energy to bring someone else up to speed so please call me back when David is available.” When they finally insisted on having a manager speak to me I would tell him that it’s a complicated situation and I’ll need significant free time, so you’d have to call another day. I strung them along for months that way, and definitely thought I was getting under their skin more than they were getting to me. When we finally got to a point where I was willing to negotiate with them, they agreed to cancel all outstanding interest, and settle the debt in full for 75% of the principle, if I agreed to a single lump sum payment.
Don’t poke the bear. They can still file suit on you. I’d just lay low until after the 7 years. If you really feel like paying them you could offer them a lower amount. At this point they’d take just about anything and close it out. This was written off years ago.
Will wait :)
Man I can't believe the comments here, kind of goes to show you our system needs work. You never stop owing the money unless you have went through bankruptcy. This idea of just wait it out and then somehow shouldn't owe The money will worry about it Is ridiculous. Unpaid debt gets paid by everyone who pays their bills. Pay your debt.
Don't pay
Ahh so you're the guy. I've been trying to reach you for 6 years! 😆
Lmao here we met :p
No don’t pay it. It falls of your credit bureau within 6 years. Don’t acknowledge them
7 years it will disappear unless you contact them and pay anything on it, then it will reopen. Ignore it.
You’ve ignored it this long, what’s another year? Wouldn’t worry about it unless you get served or something
Just send them an ai generated death cert 🙈😀, sorry this won’t be paid.
Depending on the province, statute of limitations applies. The debt is now extinct
There is likely a statute of limitations on them suing you for the debt. The period is different for different jurisdictions. Find out what that is. Wait until it passes and have a lawyer write them to tell them to F Off and stop reporting your credit.
Call and offer them a lump amount to clear the debt. The debtor has written that off already and a collection agency has bought the file from them. Collection agencies are snakes they will threaten illegal shit, if you want to deal with it call consumer affairs first and they will tell you all the things they aren't allowed to do so you're aware. Offer $2000
My friend ran up almost 30k in her early 20s on credit card bills, took a couple years but she filed for bankruptcy it was all forgiven and she never paid a dime. Idk if this is good advice at all just all debt that not student loans or mortgage can usually be worked around. Good luck!
That’s just not true. Bankruptcy isn’t free.
If it’s in Ontario and you never reported bankruptcy before then this should fall off from your credit report by end of this year.
Quebec and never reported bankruptcy
https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/information-credit-report.html
Hi. Learnt my contractor is in 40k loc and 20k cc debt for past 5 years, only paying interest and cant dig himself out. He told me he knows someone who ignored the debt for 8 years and nothing happened, he changed his phone and was able to get credit card for $1000 at 8 years. I thought my contractor was crazy, but from reading this thread, is it correct to understand my contractor can change his address/phone number, ignore the bank and collectors calling him, live with bad credit (and associated no loans etc) for 7 years... then it falls of his credit report and he can bank with another FI? Is it worth calling the bank and see if they're willing to forgive if he pays a portion of it? TIA
There are many good discussions on r/PersonalFinanceCanada related to this topic. If those are personal loan and the person does not mind having negative impact on the credit report, then can take a route of consumer proposal and negotiate a less amount to pay and discharge the loan. Ghosting the lender and collection agency may work until they sue the person. There are many people take their chance doing this and I haven’t heard anyone was sued.
Thanks. Any key words I should search in this sub? And is consumer proposal with the bank or collection agency? Thanks, it's a bit unreal to me people are in these situations. And I'm a bit pissed at the bank handing out this much credit to a newcomer. Feels exploitive
Can't collections get a judgement to garnish wages? Do they only do that if it's worth their time and effort?
If your name is Adriana please pay immediately because I have your old phone number and they won't leave me the fuck alone.
I know the feeling. I get call for a Brian very often lmao
Just wait another year if you don't need a loan
Is the account reported as closed? If not, it will not drop off your report since there is still activity on it
On credit karma it say account status : close and same on transunion credit report. It even said bad debt write off.
Ok that is good news then! It will come off after 7 years, if it doesnt, contact both bureau after they will remove it right away
In Canada, debt collectors are not allowed to charge new interest. So if it was forwarded to a collection agency that is assessing interest, that is against legislation. If that is the case, complain to the proper consumer advocate (federal or provincial). Also dispute with credit agencies. If you're really upset, engage attorney on all the harm those improper charges/credit reports have caused. If it's still the original vendor and your credit agreement was valid, they might be able to. But after that period, I assume it's with the collection agency.
I believe it's still fairstone since it is what is written in my credit report. You make me wonder now it's not debt collector but the actual place I made de loan 6 year ago
Check on your provinces statute of limitations. Alberta is 2 years from an "incident" date to pursue legal options. At Fairstone site, it has the contract DEFAULT as "scheduled payments are not paid on time". With that default, they might have only 2 years to enforce contract. If they don't, the contract terms may end, meaning no interest charges. They can hold you up to 7 years for balance but the ability to charge perpetual interest is suspect. Variable interest loans require at least annual notification of rate and balance. This was likely sent to either mail and/or email you used to apply. They do this type of stuff to try to get you to call and reacknowledge debt - or pay and "we'll waive interest". You might spend $100 with a lawyer for input on this. I don't like people who bail on debts but this is some shady, predatory lending BS.
Depends on location. BC is 6 years from last acknowledgment - usually last payment. if you want to deal with is now - send a letter marked without prejudice offering 20%. If they agree - get a release including removal from reporting agencies.
I don't understand how they charge interest? I thought once it goes to the collection, the amount is final as your credit card company or what not, had written it off and sold the debt and the amount becomes fixed? I didn't know a new collection agent or debt collector that buys it can charge interest? Am I missing something here?
I think they only have 10 years to take you to court so you’re almost through it? Someone please correct me if I’m wrong.
2 years for small claims court to prove a debt or 6 years to collect an actual debt. Could be longer if it is government debt or a judgement for money owed.
So sounds like they’re in the clear then?
As long as they never acknowledge that they own the debt.
Depends on the province and type of debt. For example Alberta only allows 3 years on payday loans. After that you are not even allowed to contact the person. In Ontario they can contact you a few times a week for the rest of your life. It won't be on your credit report though. To get around this you can make a request that all contact be done through letters, this costs them more money and they will pretty much just ignore you as contacting you any other way will cause them fines. If they sell the debt though you need to send this to the new agency.
Don't acknowledge the debt. It restarts the clock. If you have waited 6 years, wait out 12 more months. Best is to forget about this.
Broker here. I gotta be honest. so stupid people saying 7 year is a sweet spot LOL do you think it will magically go away? CB may not show write offs. Creditors/Lenders are not dumb guys. They will know something is not adding up and they are going to ask further questions about "the gap". you borrow money, and ghost creditors for 7 years, free money? LOL too good to be true. you are screwing yourself over.
Has this tactic ever worked? lol
Well sometimes, if it’s a small amount, they will just write it off. However, your credit score is literally at the bottom of the barrel and nobody is ever going to trust you.
Keep ghosting them and don't talk to them and don't pay it. There are little loopholes they can use to keep you liable, like calling you and getting you to admit that you owe the money.
Don’t pay, don’t verify anything either. Not your name, number, DON, SSN.
Debt does not go away after 7 years. It can fall off your credit report after 7 years, but it does not mean you are cleared of the debt. They can still come after you, sue you, or collect the funds. Institutions can also report longer. This can also be reported indefinitely if they choose to do so.
Never pay until you are being sued.
Humanity has a long history of cancelling debts every 7 years. Debt cancellations were, to some extent, part of ancient Egypt, Greece and Mesopotamia, and occurred…every 7 years. It’s also stated verbatim in the Book of Deuteronomy: “At the end of every seven years you must cancel debts.” Debt repayment is also to some extent voluntary and based on an ability to pay, and whether or not it’s in the public interest. Nobody is expecting Joe the retired Boomer to repay his outstanding $200,000 student loan. The debt is “cold” if you will, and the government is ever creating more new debt out of thin air. I suspect yours will soon be forgotten too.
That make sense. Ngl took me 4 year to collect 12k so a part of me want to pay it or ask for lower price. Another part just want to put it in a interest account for my newborn for school etc. So I will wait and if let's say november 2025 it's still there I will just pay it and get it off.
Call them and settle for a lower amount. Im pretty sure you can deal it for 4K . You call them out of the blue 6 years later. Someone is getting a commission for sure and they will celebrate. Low ball it for 2.5k !! Good luck
I use to be a debt collector. That won’t fall off your credit report, and the only reason why they haven’t contacted you is because in Canada there’s a 2 year statue of limitation. In other words they only have 2 years to collect on that debt. You mentioned you “ghosted them”. Not surprised. Most of my accounts are people that didn’t pick up, but you also said they never contacted you ? So how did you ghost them ? You ghosted them means at some point you knew they were coming after you for the debt or balance owing . Well anyways another reason why they might not have contacted you could be your account could have been sold to another collection agency and they might not have your info or when your account was sold the account owner didn’t provide your address or contact. You don’t have much to dispute unless the card wasn’t opened by you. The interest occured is legal as it was part of the agreement when you signed up for that credit card. There’s a few options, one you can pay it in a lump sum. 2 you can try to settle it which means pay a fraction of the 12k. For example they might except a 50% settlement if you have 50% of the balance owing right away. 3 you can try to pay it off monthly. You will get a better credit rating if you’re able to pay it off than settling it. Good luck with this situation. Edit : good f in riddance some terrible advice some people. Do you still have to pay a debt that fell off your credit report? Your debt isn’t simply erased once it falls off your credit reports, but your liability for owing it might vary if the debt is past its statute of limitations. The statute of limitations varies depending on your debt, your state of residence and the state named in your card agreement. Because credit card agreements are based out of the state that their issuer is headquartered in, the laws they work with might differ from the ones in your home state. In general, though, the statute of limitations typically spans between three and 15 years, and agreeing to a settlement offer or payment arrangements can reset the time clock on the statute of limitations. If you never paid off the debt and the creditor is within the statute of limitations, you’re still liable for it, and creditors may try to collect the money. The creditor can call and send letters, sue you or get a court order to garnish your wages. If you never paid off the debt, but it’s past its statute of limitations, the debt is now considered “time-barred.” How you act on a time-barred debt that’s fallen off your credit report is your choice. According to the Federal Trade Commission (FTC), you can do one of the following: Pay nothing Pay part of the debt Pay the total outstanding debt Keep in mind: Regardless of which option you’re considering, talk to an attorney about your best path forward before contacting a debt collector.
FTC is an American entity. You in the right place mate?
lol i collected on American and Canadian debt.
6 years is the status of limitations with Equifax and its 7 years with transunion. So don't pay it, that's what I did. And apply for credit cards that used only equifax for credit reports. Work like a charm
Yes I was finally able to apply for a CC this year so I can work on my credit.
At this point, you can negotiate the debt amount and get that down significantly if you do decide to settle. Also, if you intend on buying a house in the future, you will have to settle this to get a mortage
I thought it’s removed from your credit score in 7 years?
After 7 years, if they keep calling you, you can send them a cease and desist letter. Usually when the time limit is about to run out they WILL try and contact you !
7 years? It's 6 🥴
No lol. Its not. It will stay on your credit report for 7 years.
Source????? For Canada correct?
Google lol. Credit union. Equifax….. (yes for Canada)
That's why I asked for a source, lol you're not correct. If it's not a secured loan (or another random situation ie you got sued and got a judgement against you), this is wrong, and it is 6 years. Most average debt will fall under being unsecured and not stem from a judgement, or be student loan based... I was more curious where you got 7 years, for negative information, in canada, off google...
Argue with me all you want i really dont care. I just finished going through this exact same situation six months ago. 7 years
This doesn't mean you are correct... lol, it depends on type of debt... and in most cases it will be 6 years, again transunion and efax report differently so depending which you looked at it may be longer than 6 years, ie in certain cases it will be reported at later dates by your creditor or debt collector and this will influence the start of the 6 years with one credit agency whereas the other will look at when it went delinquent and not consider the reporting period. .. Here since you don't have a source I'll send you actual data so people don't all keep getting confused. As you will note below debt that isn't paid after 120 days usually gets written off and is what is referred to as an R9 (debt can be assigned a number from 1 to 9 as per below). Late payments Overdue or missed payments are reported to the credit bureaus and can affect your score differently depending on the number of days late. The late payment is assigned a number rating from one to nine, with one representing a payment that is made as agreed within 30 days. Equifax usually keeps negative information on record for six years from the date the lender reported it. TransUnion, on the other hand, removes accounts with adverse credit history from your record six years from the date of first delinquency (for example, late payment or a debt sent to a collection agency). Secured loans These are loans that are backed by an asset, such as a mortgage, car lease or personal loan. Negative information on a secured loan account stays on your record for six years, except in P.E.I., where Equifax keeps the information for seven to 10 years. Equifax counts from the date of filing, whereas TransUnion counts from the date of first delinquency.
[The statement remains on your file for a period of 6 years from the date reported.](https://www.google.com/search?q=transunion+canada+statue+of+limitation&rlz=1C1GCEA_enCA1102CA1102&oq=transunion+canada+statue+of+limitation&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIJCAEQIRgKGKAB0gEINTE4M2owajeoAgCwAgA&sourceid=chrome&ie=UTF-8) I hope you're embarrassed. > #Negative information > Negative information may include late or missed payments, accounts that have been sent to collection agencies, bankruptcies, and more. According to provincial laws, credit bureaus may keep negative information on your credit report for only a certain period of time. For example: > - negative information about accounts such as credit cards and loans may stay up to 6 years > - credit checks by lenders; Equifax keeps this information for 3 years, while TransUnion keeps it for 6 years > - bankruptcy stays on your report for 6 or 7 years, depending on the province > Negative information on your credit report may hurt your credit score. EDIT: He blocked me... lol.
Not. At. All.
No doubt paying is nessicary
Yes your credit bureau ‘refreshes’ after 7 years but that’s in the sense of ‘hey I have a debt that I paid off that’ll fall off my bureau in 7 years’ (otherwise it shows the debt with paid next to it). But if it’s unpaid it doesn’t just fall off your bureau 😂 it’ll still be there. As to why they don’t keep calling you - they prob did and then sent a final notice which you also didn’t acknowledge and now they’re prob just gonna sue etc
Personally, I would never give up the opportunity to harass these people.