How Long Can a Debt Be Collected in Ontario?

In Ontario, how long a debt can be collected depends on what kind of debt it is and whether the creditor has already been to court. For most consumer debts, a creditor has two years to sue you under the Limitations Act, 2002. After that, the debt is still owed, but the courthouse is closed to them. Some debts, though, have no time limit at all, and once a creditor obtains a judgment, they can enforce it against you indefinitely.

The Two-Year Rule for Most Consumer Debts

Section 4 of the Limitations Act, 2002 gives a creditor two years to start a court proceeding to collect a debt.¹ This applies to the debts most people worry about: credit cards, personal loans, lines of credit, unpaid invoices, and similar obligations. If the creditor waits longer and then sues, you can raise the expired limitation period as a defence and the court will dismiss the claim.

The two-year limit only closes off the lawsuit route. It does not cancel the debt or extinguish your obligation to pay. Creditors and collection agencies can still contact you and ask for payment; they just cannot force the issue through the courts.

When Does the Two-Year Clock Start

The clock starts on the date the claim is “discovered,” which under Section 5 of the Act is the earlier of the day you actually knew about the default and the day a reasonable person in your situation should have known.¹

For everyday consumer debts, that date is usually obvious. Miss a credit card payment and the clock starts on the day of the missed payment. For a loan in arrears, it typically runs from the first missed payment or from the day the creditor formally demanded repayment.

What Restarts the Clock

Two things reset the two-year period to zero under Section 13 of the Act, and both trip people up regularly.¹

The first is a written acknowledgment of the debt for a specific dollar amount. It must be in writing and signed, but Ontario courts have accepted emails and text messages as qualifying signatures. The second is a partial payment. Even a small payment toward an old debt restarts the full two-year clock from the date it was made.

Collection agencies know both of these rules. If you are close to or past the two-year mark, sending “just something to show good faith” is the single most common way people give up a limitation defence they didn’t realize they had.

Debts With No Limitation Period

Section 16 of the Limitations Act exempts several categories of debt from any time limit at all:

Provincial taxes, fines, and penalties owed to the Crown.¹
Student loans and grants issued under the Ministry of Training, Colleges and Universities Act, the Canada Student Financial Assistance Act, or the Canada Student Loans Act.¹
Enforcement of existing court orders and judgments.
Support obligations under the Family Law Act.
Ontario Works and ODSP overpayments collected by the Crown or a delivery agent.¹

The student loan exemption catches many people off guard. OSAP debt and Canada Student Loans do not become time-barred in Ontario no matter how many years have passed since your last payment.

Federal Tax Debt

Federal tax collection runs on its own clock. Under Section 222 of the Income Tax Act, the Canada Revenue Agency has 10 years from the date of assessment to collect unpaid income tax, penalties, and interest. That 10-year period restarts if you acknowledge the debt or the CRA takes a collection action against you.² Requesting an installment agreement, filing for bankruptcy, or submitting an offer pauses the clock rather than restarting it, and some of those events extend it by additional months once resolved.³

Mortgages

Debts secured by real property are governed by the Real Property Limitations Act, not the Limitations Act, 2002. That statute sets a 10-year limitation period for actions on a mortgage covenant, running from the date the cause of action arose. The two-year period does not apply to mortgage enforcement.

Once a Creditor Has a Court Judgment

If a creditor sues you within the two-year window and wins, the debt turns into a court order, and Section 16(1)(b) of the Limitations Act places no time limit on enforcing one.¹ The judgment itself never expires. Wage garnishments, bank account seizures, and property liens remain available to the creditor for as long as the debt is unpaid.

A judgment debt effectively follows you until you pay it, negotiate a settlement, or file for bankruptcy.

What Collectors Can Do After Two Years

Once the two-year window closes, the creditor cannot take you to court. Everything short of that is still permitted. A creditor or collection agency can call you, send letters, and ask for payment. The debt is still legally owed; you just have a solid defence if they try to sue.

How you respond matters. You do not need to deny the debt or lie about it, but any written acknowledgment or partial payment resets the clock and hands the creditor a fresh two years to sue.

How Long Debt Stays on Your Credit Report

The lawsuit limitation and the credit reporting timeline are separate. A collection account or missed payment can stay on your credit report for up to six years.⁴ Equifax Canada measures the six years from the date of first delinquency on the account, not the date of last activity.⁵

Court judgments on your credit report also stay for six years.⁴ Because a judgment never expires under the Limitations Act, your credit report may eventually stop showing it while the creditor still has the legal right to collect. Paying the balance does not remove the entry early, though it may reduce the impact on your score.

1
Ontario.ca e-Laws. Limitations Act, 2002
2
Justice Laws Website. Income Tax Act – Section 222
3
Internal Revenue Service. How Long a Debt Can Be Collected by the CRA
4
Financial Consumer Agency of Canada. How Long Information Stays on Your Credit Report
5
Equifax Canada. How Long Does Information Stay on My Equifax Credit Report