Old Credit Card Debt Sold to a Debt Buyer in Ontario: Is It Still Enforceable?
A letter or call arrives from a company you have never dealt with, saying it now owns an old credit card or loan account you stopped paying years ago. Is that account actually still enforceable, or can it be ignored? Selling a debt does not erase it, does not restart the clock on how long you can be sued, and does not automatically prove the new owner has a valid claim. Here is what changes when a debt is sold in Ontario, what does not change, and what to check before you respond.
What “sold to a debt buyer” actually means
When someone stops paying a credit card, line of credit, or personal loan, the original lender usually collects in-house for a few months, then hands the account off one of two ways: assigning it to a collection agency, which collects on the creditor’s behalf and needs the creditor’s written authorization before it can even threaten legal action, or selling it outright to a debt buyer — a company such as Canaccede Financial Group or PRA Group / Portfolio Recovery Associates, both active in Ontario. The difference matters: once sold, the buyer becomes the creditor and needs no one’s permission to sue you, get judgment, and enforce it, including against a home.
Selling the debt does not restart the two-year clock
Ontario’s Limitations Act, 2002 gives most unsecured creditors two years from when a claim is “discovered” — usually your last payment or activity on the account — to sue you. That clock belongs to the debt, not to whoever holds it: selling or assigning an account does not create a new claim or reset the discovery date, so a debt that was two years old the day before it sold is still two years old the day after. Past that window, the claim may already be statute-barred — but that is a defence you must raise yourself, not something automatic. An expired limitation period does not delete the debt, stop it from being reported, or stop the new owner from suing; an unanswered claim can still end in a default judgment, old debt or not. If you are ever served with anything carrying a court file number, the response deadline is real and short.
Proving the debt is really theirs
Because a debt buyer is asserting rights that used to belong to your bank, Ontario law expects more than a purchase somewhere in the past. Under the Conveyancing and Law of Property Act, an assignment of a debt only becomes a complete legal assignment once you — the debtor — have been given express written notice of it. In practice, part of what makes a purchased account enforceable against you is whether an actual paper trail exists: an assignment or bill of sale from the original creditor, notice sent to you, and records tying your specific account, balance, and dates to what the buyer is now claiming. Debt bought in bulk portfolios is frequently thin on this kind of documentation, so asking for proof of the chain of ownership — not just a statement of the amount — is one of the most concrete things you can do.
It is also worth confirming who you are dealing with. Collection agencies in Ontario must be registered with the Ministry of Public and Business Service Delivery and Procurement under the Collection and Debt Settlement Services Act — look up a registration number on the Ministry’s public registry. A third-party agency calling on a buyer’s behalf must also send written notice before it starts calling, then wait six days before demanding payment. Whether a debt buyer collecting its own purchased account needs its own registration is less clear-cut and can depend on how it is structured — worth confirming rather than assuming. Either way, ask for a registration number, the name of the original creditor, and a full statement of the account before discussing anything else.
The trap: a small payment can revive an old debt
Section 13 of the Limitations Act, 2002 lets a creditor’s clock restart if you make a payment or acknowledge the debt in writing before the two-year period runs out. A new owner calling about an old account has every incentive to get you talking, negotiating, or paying something small as a show of good faith — and even a partial payment or a text confirming the balance has been treated as enough to reset a clock that was about to expire. If the account is old and you are unsure where you stand, that conversation is the moment to get advice first, not after.
What to do right now
- Do not confirm, admit to, or pay anything on the account until you know how old it actually is.
- Ask in writing for proof of the assignment or purchase, and a full accounting of the balance.
- If a collection agency is calling, confirm its registration number on the Ministry’s registry before discussing anything else.
- Write down the date of your last payment on the original account and the date of this new contact — that gap is what a limitation defence depends on.
- If you are served with a claim rather than just contacted, treat the deadline as real and see what’s different when a collection agency or debt buyer is the plaintiff.
Frequently asked questions
Does selling my debt to a new company restart the two-year limitation period? No. The clock is tied to when the debt was discovered — usually your last payment — not to when it changed hands. A sale does not create a new claim.
Can I just ignore a debt buyer since it isn’t my original bank? Not safely. A debt buyer that owns your account can sue you directly in its own name, and an unanswered claim can end in a default judgment even on an old debt.
How do I know the company that says it bought my debt is legitimate? Ask for its registration number if it is a collection agency and confirm it on the Ministry’s registry, and ask for documentation showing the assignment from your original creditor, your account number, and the current balance.
I already made a small payment to be helpful — did I just restart the clock? Possibly. A payment or written acknowledgment made before the limitation period expired can reset it. If you are unsure of the dates, get advice before making or discussing any further payment.
A letter or call from a company claiming to own your old debt is unsettling, but it is not automatically a lawsuit, and it is not automatically valid. Tell us what you received and we will help you work out whether the account is legitimate, whether it is still within the limitation period, and what to do next.
Sources: Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, ss. 4, 5, 13 · Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34, s. 53 · Collection and Debt Settlement Services Act, R.S.O. 1990, c. C.14 · Search a business licence, registration or appointment, Consumer Protection Ontario · Stop collection agency calls, Consumer Protection Ontario · Small Claims Court, Ministry of the Attorney General. General information for Ontario, not legal advice.
General information for Ontario, not legal advice. Reviewed by Angelos Spingos. Last reviewed September 17, 2026.