Collection of Old - Stats Barred - Loans - Ontario Limitiation Issues

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Ontario Limitiation Issues

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Topic: Ontario Limitiation Issues

Posted By: SolveStudentDebt
Subject: Ontario Limitiation Issues
Date Posted: 29/July/2010 at 2:50am

Alright, so Ontario limitation issues are a tad bit trickier for many of you. There are the limitation issues and then there are the "resistance" issues that the government puts up as an effort to thwart your attention from seeking a limitation benefit in respect of a guaranteed Ontario student loan. First of all, a limitation issue is a benefit to an individual who cannot pay due to financial hardship. Because the Ontario student loans system does not provide any forgiveness of loans due to a hardship, a limitation benefit would be the next best thing. Unfortunately, the Ontario government takes the position that no limitations bind them from taking any action or proceedings at any time.

I would like to point out once again that the Ontario Limitation Act was ammended in 2004, citing that limitations do not apply to Ontario student loans. If you were to approach the Ontario government and simply ask them if limitations apply towards Ontario loans they will say "no". Of course they want to collect money and not make people aware of anything that would otherwsie restrict them. It is typical behavior within government financial and debt recovery sectors. In my opinion, the ammendment to the Act in 2004 applies to loan agreements and contracts that were entered into on or after the date of the new legislation coming into force. So, that would mean that any agreement or contract for an Ontario student loan that was entered into before the date of it's coming into force (April 2004) would not apply in these cases.

I have conferred with many professional law groups and professionals within The CFW Group's network and we have arrived at the same opinion. No one has yet to challenge the Ontario government on this but I am sure willing, as always.

Johnny

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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

http://www.solvestudentdebt.com" rel="nofollow - solvestudentdebt.com

Replies:

Posted By: 9877654
Date Posted: 31/July/2010 at 4:14am

Johnny, thanks for that. I suspect the problem is that most people who would raise this issue in the 1st place can't afford to invest the time, energy and money required for a major legal challenge. Until one can, the status quo will remain the Ontario government telling people "no limitation period" correct?

So we have people in their 60s and soon 70s still paying, and losing all tax refunds? Murderers, rapists and drug dealers are re-integrated into society sooner or later (too soon for some), but collection agencies haunt us to our graves? Am I the only person to whom this seems lopsided?

Also if you have a moment pls see my other post - i.e. in the alternative, if I can't count on an SOL, what do you suggest I do?

Thank you kindly Johnny.

Posted By: SolveStudentDebt
Date Posted: 03/August/2010 at 11:22am

No, not necessarily. I am working a number of these right now. All creditors and such try to distract you with the no limitations objection. Why would they arm you with information that would otherwise restrict them them from recovering the debt?

My friend, we have a student debt crisis whereas student loans will survive the 18-20-year old that are borrowing today. It is a catastrophy. The govenrment needs people to be in debt so it can continue to feed it's machine. The problem is the hierarchy within that makes all the decisions and is responsible for the mess that it has gotten Canada into, both economcially and politically. CRA and the Canada Student Loans Program. These two Crown organizations are wreaking havoc on Canadians and there is absolutely no way to hold them accountable. They are impervious to the law and prosecution for their malicious behaviors and actions towards those who it does not like, and the same for the hierarchical brother and sisterhoods within CRA who order agents down on the front line to act and behave in a malicious and unlawful manner towards an individual or business. You see, power demands obedience. Anyone who challenges or does not conform in the manner in which is dictated by that system of government is in danger of some form of retribution.

Lastly, if a limitation issue is not the issue then you have to do what you can to remain safe. If you want help with that you will have to become a client.

Johnny

Posted By: indigo.star
Date Posted: 03/August/2010 at 11:29am

Thank you for your information on the limititation issues.

For the last ten years or more I have not received my tax money back due to outstanding loans.

I am unable to pay because I am in financial trouble. I have been to lawyers and they have referred me to bankruptcy. There is no way out.

I regret taking a student loan for my studies. It does not matter if I can not pay the loan they still tack on the interest month after month. What a nightmare.

Posted By: SolveStudentDebt
Date Posted: 03/August/2010 at 1:08pm

When did you cease studies? When did the account fall off into default? When did you last make a payment?

Posted By: indigo.star
Date Posted: 03/August/2010 at 2:15pm

I studied in Montreal in 1990 and in Ontario in 1992. They have changed my account into so many different hands that I cannot give you all the information you asked for. I know that when I filed my taxes in 2008 they took the tax money to pay my debt. I have not filed for 2009 because I am so fed up.

Posted By: SolveStudentDebt
Date Posted: 04/August/2010 at 6:09am

When did you last file for interest relief or a revision or terms? When you finished studies, what happened after the 6-month grace period? Did you file for any benefits or did you go into repayment?

Posted By: Prime
Date Posted: 19/March/2011 at 10:08am

ONTARIO LIMITATIONS PERIOD [2011]

Could you please review the Ontario limitations period in regard to the collection of defaulted ontario student loans. (I have a very old loan and recent collection calls have become aggressive and threatening, so I would like to take proactive action)

A review of recent developments, news, cases, would be appreciated. Along with any links to core resources on Ontario Limitation Periods.

Thank you so much

prime

Posted By: SolveStudentDebt
Date Posted: 23/March/2011 at 2:47am

The Ontario government is not bound by any limitations with respect to recovering money owed to the Ontario Student Loans Program. This ammendment was brought in around 2002 or so, but came into force in 2004. It is my understanding that if an Ontario guaranteed loan became due and payable on or before 1998 (of the date of the coming into force of the no-limitation rule) then the old limitation law applies, which is 6 years. A lot of study and collaborating with legal associates of ours in Ontario have come up with this.

Johnny

Posted By: Prime
Date Posted: 20/June/2012 at 9:54am

Back Again:

Thank you for your response, and well written responses too. I have also been reading your posts on Statute of Limitations & Bank Risk Student Loans

http://www.canadastudentdebt.ca/forum_posts.asp?TID=6215&title=statute-of-limitations-bank-risk-student-loans

I have concerns about the 1998-2002 period regarding Ontario Limitations & students loans recover. (was it a typo?) I'm guessing this is where all the technicalities that require legal expertise are required.

General Questions:

1) Would it not be possible to get a general court order recognizing that all Ontario student loans in default prior 2002 be subject to the Ontario Limitations Act 1998 with the 6 year limitations period and barring the Gov't of Ontario and any agents/agencies from recovering or collecting this debt after the 6 year period (2008)?

2) Is the period between 1998 a grey area or are there clear rules for this period?

I'm asking because of s. 13 "Acknowledgements" O.L.A. 2002 which seems to punish people who act in good faith regarding limitations periods. [Considering how lengthy a period in my case 1997-2012 how would I find out about these possible acknowledgements while protecting my legal rights]

I have a strong desire to take pro-active action (I have looked at bankruptcy, consumer proposals, good faith payments, forcing the issue into court action)

Thank you for your contributions,
prime

Posted By: Prime
Date Posted: 11/September/2012 at 3:41am

Ontario Student Loan Limitations Issues:

Statute of Limitations (Pre Limitations Act 2002)

I have been following the discussions and doing my own research. According to the information I have found on this forum. Defaulted Ontario Student Loans had a statute of limitations of 6 years for court action in civil court.

I am trying to find that specific statute and section that covers the 6 year limitation on court based collection of defaulted Ontario Student Loans. It has been mentioned several times in forum correspondence, but I have not seen the specific statute mentioned (I of course admit I may has just missed it).

If you know the statute and section, could you please provide it, and a link if possible. Thanks.

(I'm aware of all effects of the Limitations Act 2002)

Prime
(lost in a maze of cyber laws)

Posted By: Prime
Date Posted: 11/September/2012 at 4:30am

ADD ON to Above Post:

Ontario Student Loan Limitations Issues:

6 Year Limitation Period (pre Limitations Act 2002)

Is this the section posters are referring to Actions on the "case" (tort and related actions not otherwise subject to a special limitation period)

Limitations Act, R.S.O. 1990, c.L.15, s.45(1)(g)

http://practicepro.ca/practice/pdf/LimitationsChartComparison2005.pdf" rel="nofollow - Limitations Comparison Chart

This would mean that defaulted and actionable Ontario Student Loans did not have a specific limitations statute under the Limitations Act or other statute before the Ontario Limitations Act 2002.

I have looked at regulations under Ministry of Training, Colleges and Universities Act R.R.O. 1990, REGULATION 774 ONTARIO STUDENT LOANS MADE BEFORE AUGUST 1, 2001 found at http://www.canlii.org/en/on/laws/regu/rro-1990-reg-774/latest/rro-1990-reg-774.html#Claims_for_Loss__84634" rel="nofollow - CanLII .

Just trying to find that actual 6 Year rule

Again thanks for all your help.
Prime

Posted By: SolveStudentDebt
Date Posted: 12/September/2012 at 5:58am

The Ontario government makes it very difficult for borrowers because, like everyone else, they are trying to recover money and not arm people with information that would otherwsie restrict them from doing so. Governments have an incredible ability to avoid transparency and say whatever it is that they want to without consequence or second thought.

Back before 2004, the limitation period pertaining to OSAP was a 6-year period from the day it was last acknowledged by payment or in writing.

One way to look at this is when the loan was written. If it was written before the coming into force of the no limitation law, then there is a possibility that the debt carries the 6-year limitation period. If the loan was written up on or after the coming into force of the no limitation law then, of course, there are no limitations that will ever bind the Ontario government from recovering it.

There are a lot of overlapping laws in this country and all provinces. Contract law even applies to loan agreements because they are contracts.

I have seen Ontario loans barred. One thing is for sure. If a loan is already barred then it cannot be resurrected from the dead. Based on that fact, the spirit of the law is what "should" count and not how government people and creditor's rights lawyers hack it all up so that it serves them yet violating the rights of those who would otherwise be entitled to enjoy the benefit and freedoms provided by it.

Posted By: footloose
Date Posted: 12/September/2012 at 12:09pm

Federal student loans that were issued up to and including July 31, 1995 were issued pursuant to the Canada Student Loans Act. These loans were issued by participating financial institutions, credit unions and caisse populaires. In order to participate in issuing a student loan, a financial institution had to sign an agreement with the Federal government which in turn "guaranteed" any defaulted student loan issued by the financial institution. The Federal government paid the financial institution for the defaulted student loan which in turn was transferred to the Federal government. However, pursuant to Section 29 of the Canada Student Loans Regulations, these defaulted student loans were then ASSIGNED to the lending financial institution to collect on behalf of the Federal government. These loans are referred to as GUARANTEED student loans.

Pursuant to Subsection 19.1(1) of the Canada Student Loans Act, the Federal government has 6 years in which to litigate ( i.e. to sue the student loan debtor ) for the repayment of the defaulted student loan providing the debtor has not acknowledged the student loan either within or outside the 6 year limitation period. Each time a defaulted student debt is acknowledged, it resets a new 6 year limitation period.

Subsection 19.1(2) provides for a "right of set-off" by the Federal government vis-a-vis the Canada Revenue Agency ( CRA ) to withhold any monies owing and payable to the student loan debtor such as income tax refunds and the quarterly GST rebate and apply these amounts against any outstanding and unpaid student loan. Subsection 164(2) of the Income Tax Act ( Canada ) also authorizes the CRA to withhold any monies owing to Her Majesty in Right of Canada or to a Province and apply them to any outstanding debt.

Subsection 19.1(3) provides for an acknowledgement of the defaulted student loan which, in turn, provides for a further 6 year limitation period.

Subsection 19.1(4) sets out 4 different ways in which a defaulted student debt can be acknowledged.

Subsection 19.1(5) provides for the acknowledgement of a defaulted student debt after a limitation period has expired thereby establishing a new 6 year limitation period.

If the last acknowledgement made on these defaulted student loans was in 2001, or at the earliest of January 1, 1998, and if both the Federal and Provincial loans were issued in Ontario, then these student loans are NOT "STATUTE-BARRED".

Federal student loans that were issued between August 1, 1995 and July 31, 2000 were issued pursuant to the Canada Student Financial Assistance Act. Once again, these loans were issued by participating financial institutions, credit unions and caisses populaires. However, unlike the previous regime under the Canada Student Loans Act, defaulted student loans were NOT "guaranteed" by the Federal government. Instead, the Federal government paid a "risk premium", much like an insurance premium, to those financial institutions that held defaulted student loans or student loans that were expected to go into default. Any student loan that went into default remained with the financial institution who then was responsible for its collection. These loans are referred to as RISK-SHARED student loans.

Pursuant to Subsection 16.1(1) of the Canada Student Financial Assistance Act, the lender has 6 years in which to litigate ( i.e. to sue the student loan debtor ) for the repayment of the defaulted student loan providing the debtor has not acknowledged the student loan either within or outside the 6 year limitation period. Once again, each time a defaulted student debt is acknowledged, it resets a new 6 year limitation period.

Subsections 16.1(2) to (5) mirror Subsections 19.1(2) to (5) of the Canada Student Loans Act.

Both the Canada Student Loans Act and the Canada Student Financial Assistance Act provide for a limitation period of 6 years.

All provinces have enacted Limitation Acts that provide for a limitation period on commercial debts including student loans, both Federal and Provincial not to exceed 6 years, albeit, some Provinces have limitation periods that are less than 6 years. This maximum 6 year limitation period coincides with the limitation period provided under the Canada Student Loans Act as well as the Canada Student Financial Assistance Act.

Under the Ontario Limitations Act, R.S.O. 1990, CHAPTER L.15, Paragraph 45(1)(g) provides for a limitation period of 6 years for an action for a "simple contract or debt grounded upon any lending or contract without specialty". You will notice that there is no specific reference made to a student loan issued under the Canada Student Loans Act, the Canada Student Financial Assistance Act or the Ministry of Training, Colleges and Universities Act. In other words, Paragraph 45(1)(g) provides for all commercial loans as well as student loans.

Under the Ontario Limitations Act, 2002, S.O. 2002, CHAPTER 24, SCHEDULE B, Paragraph 16(1)(k) provides for a NO LIMITATION PERIOD for "a proceeding to recover money owing in respect of student loans, medical resident loans, awards or grants made under the Ministry of Training Colleges and Universities Act, the Canada Student Financial Assistance Act or the Canada Student Loans Act.

For those commercial debts and student loans that fall between these two Limitation Acts, a Transition section has been provided for in Section 24 of the Ontario Limitations Act, 2002.

Without explaining in technical detail the provisions of Section 24, this, in essence, is what it says. If a debt, including a student debt, went into default under the provisions of the Ontario Limitations Act, R.S.O. 1990 and if the limitation period for the commencement of an action ended BEFORE January 1, 2004, then the provisions of the "former limitation period" prevails. On the other hand, if the limitation period for the commencement of an action ended AFTER January 1, 2004, then the provisions of the "current limitation period" prevails.

An example will help illustrate how the provision of Secion 24 operates. Let's say that a student debt, either Federal or Provincial goes into default on June 30, 1997 and no acknowledgements have been made since the default. Under the Ontario Limitations Act, R.S.O. 1990, Paragraph 45(1)(g) provides for a limitation period of 6 years to commence an action. Counting forward 6 years, this student debt limitation period is June 30, 2003. Because this limitation period ended BEFORE January 1, 2004, this student debt is now "STATUTE BARRED" pursuant to Section 24 of the Ontario Limitations Act, 2002.

It should be noted that unlike the provisions of Section 19.1 and Section 16.1 of the Canada Student Loans Act and the Canada Student Financial Assistance Act respectively, there is no such provision in the Ministry of Training, Colleges and Universities Act to extend a limitation period by an acknowledgement made AFTER the initial limitation period has expired. In other words, once a limitation period has expired, a new limitation period CANNOT be established by making an acknowledgement of the student debt. This principle has been firmly established in the common law rule of Limitations in which a new limitation period can only be established if an acknowledgement is made WITHIN a limitation period.

Now, let's say that a student debt, either Federal or Provincial goes into default on January 5, 1998 and no acknowledgements have been made since the default. Using the same example as illustratated above, and counting forward 6 years, this student debt limitation period is January 5, 2004. Because this limitation period ended AFTER January 1, 2004, this student debt has NO LIMITATION PERIOD pursuant to Section 24 and in conjunction with Paragraph 16(1)(k) of the Ontario Limitations Act, 2002. Therefore, any further acknowledgements of this student debt will have no consequences to the commencement of an action.

I trust that this commentary will help explain how either a Federal or Provincial student loan issued in Ontario under the Canada Student Loans Act, the Canada Student Financial Assistance Act or the Ministry of Training, Colleges and Universities Act is provided for under the Ontario Limitations Act, R.S.O. 1990, CHAPTER L.15 or falls under the Transitional rules of Section 24 of the Ontario Limitations Act, 2002, CHAPTER 24, Schedule B and is caught by the NO LIMITATION PROVISION of Paragraph 16(1)(k).

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Educating one Consumer at a time

Posted By: SolveStudentDebt
Date Posted: 16/September/2012 at 7:59am

From what some legal officials tell me, Ontario loans that were contracted and due and payable before April 1998 the prescribed limitation period of 6 years may apply.

There are others who say that Ontario loans taken out before the coming into force of the new limitation law in Ontario are bound by the previous limitation period of 6 years, and there are no limitations that bind the govenrment of Ontario from recovering at any time on those written on or after the date of it's coming into force.

UNfortunately, you get different interpretations and stories from everyone. The fact is what is sought and this needs to come from something higher than a legislative assembly I would think.

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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

http://www.solvestudentdebt.com" rel="nofollow - solvestudentdebt.com

Posted By: administrator
Date Posted: 16/September/2012 at 10:56pm

And here's another curve ball on this one. What if you took out OSAP while living permanently in BC? If you moved from Ontario to go to school in BC, your initial funding if within six months of arriving in BC would be deemed to be OSAP. However, after 6 months, you are officially a BC resident but since your initial funding was from OSAP, all future funding would come from OSAP, even though you are officially a BC resident i.e drivers license, provincial taxes, health care are all BC stuff. Whose limitation laws apply then? BC or Ontario or Federal?

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Administrator
Mark OMeara
Author of Let Go and Heal: Recovery from Emotional Pain
https://LaughSingWrite.com - http://bit.ly/heal2024

Posted By: SolveStudentDebt
Date Posted: 17/September/2012 at 1:22am

Anything student loans governed by the Canada Student Loans acts are bound by federal laws. Provincial loans are governed by the provincial laws that apply to them though. OSAP loans are property of the Ontario government. JUst like BC loans are the property of the BC government and Student Aid branch.

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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

http://www.solvestudentdebt.com" rel="nofollow - solvestudentdebt.com

Posted By: Prime
Date Posted: 25/September/2012 at 6:28am

Hello Footloose!,

I wanted to post my thanks for your lengthy and helpful explanations. (And your otehr detailed posts) But not the headaches :) I have been investigating the Limitations issue, and the more I learn, the angrier I get at this "stealth usurpation of citizens rights" by the government of Ontario.

I have found another major issue relating to the No Limitations Clause in Ontario. That is that banks and financial institutions (which may include debt agencies) are only required to keep records for 6/7 years (I'm searching for the statutes on this).

Thus if you have a debt over ten years old, and the accounts have been closed, records destroyed. It may be impossible to reconstruct an independent and accurate financial picture of a persons debt issues, including payments.

P.S. I think there is a Charter Rights case in the No Limitations Clause and in structure of s. 16-24. (Not to mention human rights issues, and possible Ombudsman action).

Again Thanks for your detailed posts

Prime

Posted By: Prime
Date Posted: 25/September/2012 at 6:41am

Generally Ontario Limitations Act Conundrum

I have been researching this over the last few weeks with statutes, legal books, law blogs, lawyers websites, legal publications, civil court cases, small claims court cases, CanLII cases.

I may state the following discoveries.

1) Nobody seems to have written anything that clearly states a rule, that a court could follow.
2) There does not seem to be any case law, decided cases, on limitations & student loans.
3) There does not appear to have been any court, or charter, challenges to the law.
4) Once the label "student" is attached to an issue, nobody give a damn.
5) There a lot of financial barriers to actually pursuing a test case, including just getting accurate information (plus loads of Privacy Law issues).

There is an actual law book on this issue; The Ontario Limitations Manual by Bocska, Rosemary but it seems only to available in courthouse law libraries (but I'm looking into this).

I do want to thank everybody that has contributed to this discussion, it has been better than most legal publications.

Prime

Posted By: footloose
Date Posted: 26/September/2012 at 11:29am

Hello Prime

Thank you for your kind remarks regarding my postings. While I spend a considerable amount of time in researching my topics in order to accurately and correctly assist our members in the resolution of their many concerns, there are still some members who are unhappy with my posts.

I do not make the law, I do not interpret the law, I do not enforce the law, I only report the law. And if the law produces negative and unintentional results, so be it. So please, do not shoot the messenger.

As you will note from my many posts, I completely support, document and authenticate my comments and statements to Acts, Statutes, Regulations, Procedures and stated Policies in order to provide credibility to my posts. Any reader or member can validate the authenticity of my references by simply visiting the source. This is the way that I was trained over 40 years ago while studying and preparing for my CGA designation. And while I was an adjunct professor of Business Administration at Ryerson University in Toronto, this is how I taught my students to do their research.

In regards to your interest into the law of Limitations and any Statutory references to the retention of records by a business, please be guided by the following comments.

Every Province and Territory in Canada has a Limitation Act. The limitation periods range anywhere from generally a two-year period all the way to a no limitation period depending upon the type of action that is sought. For most business transactions, the limitation periods generally range from two years to six years with some exceptions. Student loans are either provided for under the general limitation period of a particular Act or are provided for separately. But in either case, no Provincial student loan is provided for for less than six years. In Ontario and Nova Scotia, there is no limitation period for Provincial student loans. Federal student loans are provided for under the Canada Student Loans Act and the Canada Student Financial Assistance Act and both Acts provide for a limitation period of six years.

Section 32 of the Crown Proceedings and Liability Act provides for a limitation period of six years to commence an action to recover a debt owed to Her Majesty in Right of Canada, which of course includes Federal student loans. However, it should be noted that under the Ontario Limitations Act, 2002 that any Federal student loan issued under the Canada Student Loans Act or the Canada Student Financial Assistance Act in Ontario is subject to a NO LIMITATION PERIOD in which to commence an action. This is provided for in Paragraph 16(1)(k). This only applies to those financial institutions that issued Federal student loans and were responsible for collecting any Federal student loan that went into default.

It is also interesting to note that under Subsection 9(1) of the current B.C. Limitation Act that once a cause of action has been extinguished due to the expiration of a limitation period, the debt is also extinguished. Section 38 of the B.C. Financial Administration Act provides for a "right of set-off". In my opinion, a very strong argument could be made that if a B.C. Provincial student debt is extinguished after the limitation period expires, then the "right of set-off" also expires. To my knowledge, this argument has not been presented in a B.C. court.

The Newfoundland Limitations Act provides for a similiar rule. Under Section 17 of that Act, a Provincial debt expires upon the expiration of a limitation period. B.C. and Newfoundland are the only two jurisdictions in Canada whereby, if a limitation period expires, so also does the cause of action and ultimately, the debt itself.

In regards to your interest and concerns regarding the legal requirements for the retention of books and records in Canada, the only Statute that addresses this issue is the Income Tax Act ( Canada ) and its related Regulations. This is provided by Subsections 230(4) to (7) and by Income Tax Regulation 5800. In addition, the Canada Revenue Agency has produced an Information Circular entitled Books and Records, Retention/Destruction and is referred to as IC78-10R5 and has been revised as recently as July 2010. Paragraphs 24 - 29 of this Information Circular discuss the provisions of Subsections 230(4) to (7) and the related Regulations.

Prime, i trust that this is the information you are seeking. If you have further concerns, please do not hesitate to post them here.

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Educating one Consumer at a time