Threat of legal action for debt past statute
Should I continue ignoring this?
When I went on disability 2 years ago for an escalating physical impairment, I consulted a lawyer to advise if I should declare bankruptcy since there was now no way I could pay the $8,000 in credit card debt. I own no investments, property or even a vehicle. I cashed out all my RRSPs in the 3 years leading up to the disability diagnoses. He said that I'm Creditor proof and to ignore collection agencies if they start to harass me. He explained the statute of limitation to sue is 2 years and that acknowledgement of the debt, via phone or email, will reset the 2 year statute.
He explained that if they threaten court action that all they can do is get a default judgement if I don't show up and there is nothing they can take. He also said declaring bankruptcy would be unnecessary and big process where I had declared before over 25 years ago.
Just before the 2 years were up the collection agency it had been sent to last year, sent my debt to a law firm who - even though it's now 6 months later and now past the 2 years - won't stop calling and emailing and now say they are going to force bankruptcy. Previous letters said it would be to garnish my wages or bankruptcy now its just says bankruptcy.
I know the lawyer gave the correct advice and I can show documentation of an escalating disability and as such I will never be able to work again. BUT if I do reach out to the law firm and say look - here is my financial situation, then they'll know there is nothing they can gain BUT if I contact them I think it would constitute acknowledgement of debt and they'll harass further.
If they set a court date, I know my anxiety over this is that I'll not show up and let it go to default judgement.
When they get to court, will they get access to more info about me such as previous bankruptcy and government disability? Have they probably already obtained that info and that's why they dropped the idea of wage garnishment and just want to know my assets?
If they get default judgement for bankruptcy and the court contacts me - what then?
Thanks
Posted Aug 14, 2026, 12:42 AM UTC