BC Amends Limitation Act

BC Amends Limitation Act to two years from six.

The new Limitation Act came into force June 1, 2013. The Limitation Act sets out the time periods people have to start a proceeding to sue one another in the civil justice system. While many other laws set limitation periods, the Limitation Act sets the default regime, which means that unless another law sets a different limitation period, the Limitation Act applies.

The key change involves moving from a variety of basic limitation periods, based on the type of legal action, to a single two-year basic limitation period for all civil claims. Exceptions to this are civil claims that enforce a monetary judgment, exempted claims and actions that have limitation periods set by other statutes.  This would include claims such as child support.  An acknowledgment of the debt will reset the limitation periods.  A person will continue to have 10 years to enforce a money judgment.

The new legislation will likely be the subject of different interpretations and litigation.   So, we expect matters to evolve over time.

What does this mean for consumers?

What this means that if there has been no contact or acknowledgement of a debt after two years, then the time limit for proceeding in court will have expired. Does this mean that the debt will be expunged?

Will creditors become more aggressive in their collection procedures?

Given that the time limit is changing from six years to two years, will creditors become more proactive in their collection procedures.  Will they start a civil court proceeding for a legal remedy against debtors to preserve the time limits?

Will there be more law suits filed?

Given the much shorter time period, can one assume that creditors will become more aggressive to protect their rights to enhance collections?  Only time will tell.

Will debtors become more proactive in dealing with their debts and speaking to a Trustee to determine their options?

It has always been our position that it is better to be proactive when dealing with debt, rather than reactive.  Trying to wait out any limitation period by going “underground” is not a proactive way of dealing with debt.  And frankly, why would you want to live that way, constantly looking over your shoulder to avoid creditors.

Statute of limitation law has always been very complex and subject to numerous technical arguments.  In the past, this has led debtors to believe that their debt had been extinguished, wherein reality it had not been.   We see no reason to believe that this will change.  Only time will tell how the changes to the Limitation Act will play out.

As stated above, it is better to be proactive rather than reactive when dealing with debt.  If you are in debt and only making minimum payments or less, you should speak to the Trustee at Boale, Wood & Company Ltd.  Call us for an appointment. (604) 605-3335 or visit us at www.boalewood.ca