November 12, 2025
Does debt ever expire? Will it simply go away on its own? Not exactly, but it will disappear from your credit report eventually. Find out when why you should act sooner than that here.
You may have heard that debt expires after five or seven years. It’s an appealing idea that if you can avoid paying long enough, you’ll never have to.
Unfortunately, the idea that debt expires after a specific timeframe is a myth.
It's rooted in some truth, though. Creditors may write off a debt at any time and can only legally pursue you for an unpaid debt for a certain period. Negative information, such as an unpaid debt, also only remains on your credit report for a specific period.
Knowing these time limits is important if you’ve had an unpaid debt for a long time.
Creditors can only pursue legal action for unpaid debts for a limited time, depending on the province or territory where you live. This time frame, known as the statute of limitations, determines how long a creditor can take legal action to collect a debt.
Here’s a breakdown of the rules by province and territory:
It should be noted that creditors can still call you after the statute of limitations period has passed. The statute just prevents them from taking legal action against you for the debt after that period of time.
The statute of limitations is not a set in stone period, it can reset. This can happen for a variety of reasons. Once the clock resets, creditors gain more time to pursue collection through legal action.
Here’s how the statute of limitations can reset:
The idea that debt “expires” likely comes from how long negative information, like unpaid debts, stays on your credit report. While a debt never truly expires, it does eventually fall off your credit report, making it less visible to lenders.
There are two main credit bureaus in Canada: Equifax and TransUnion. Each has its own rules for how long certain debts stay on your credit report.
Equifax removes unpaid debts after 6 years from the date of last activity (e.g., your last payment or acknowledgment of the debt).
TransUnion also typically removes unpaid debts after 6 years but some information may stay on your report for 7 years, such as declaring bankruptcy.
Once the information disappears from your credit report, lenders will no longer be able to see it. Remember though, just because a debt no longer appears on your credit report doesn’t mean it’s gone.
Hoping a debt will expire under the statute of limitations or disappear from your credit report without paying is unlikely to work. Creditors rarely sit idly by while waiting for time limits to run out.
They typically exhaust all available options to collect, including aggressive collection efforts, legal action, and wage garnishment.
Ignoring a debt also damages your credit score, especially when it moves into collections. The negative impact can linger long after the debt disappears from your credit report. Facing the issue directly and exploring repayment options or debt relief solutions is a better strategy for protecting your financial future.
There is a way to prevent your wages being garnished or debt collectors from calling. There’s even a way to stop these after they’ve started.
If you’re facing wage garnishment or relentless collection calls, speaking to a Licensed Insolvency Trustee (LIT) is a crucial first step. An LIT can help you explore two main options: filing for a consumer proposal or declaring bankruptcy. Both options can provide immediate relief by issuing a stay of proceedings, which legally halts any collection efforts, including wage garnishment and calls from creditors.
A consumer proposal is a formal, legally binding agreement between you and your creditors to settle your debt for less than what you owe.
A Licensed Insolvency Trustee will assess your overall financial situation and then negotiate with your creditors to reduce the amount you owe to an amount you can afford to pay. It’s tailored to your situation.
This process can reduce your debt by up to 80% AND it even allows you to keep all your assets, like car and home.
Once the proposal is filed, the stay of proceedings kicks in and your creditors will no longer be able to call or take legal action against you.
Bankruptcy is a legal process that provides people with a fresh financial start by eliminating most or all of their debts. When you file for bankruptcy, a Licensed Insolvency Trustee will look at your financial situation and guide you through the process.
A first bankruptcy typically lasts nine months, allowing you to become debt-free quickly, provided you meet all the requirements, such as making required payments and attending financial counselling sessions.
In some cases, bankruptcy may last longer if your situation is more complex. During this time, your Trustee will guide you through the process and work with creditors on your behalf.
Filing for bankruptcy halts all collection efforts, including wage garnishments and legal actions, as the stay of proceedings takes effect immediately.
While bankruptcy may involve surrendering some assets, you will not lose everything. A variety of items are exempt from the bankruptcy process in each province.
If you’re struggling with debt, a Licensed Insolvency Trustee at BDO can help. Licensed Insolvency Trustees are licensed by the federal government and have the expertise to guide you through your options. Our Trustees take a non-judgmental, compassionate approach to helping people facing financial challenges.
One of our Licensed Insolvency Trustees can assess your situation thoroughly and show you all the debt relief options available to you. They'll explain what each option means for you and your financial future, helping you make an informed decision that works best for your circumstances.
The first consultation with one of our Trustees is free, so there’s no pressure or obligation to move forward.
November 12, 2025
Does debt ever expire? Will it simply go away on its own? Not exactly, but it will disappear from your credit report eventually. Find out when why you should act sooner than that here.
