In In re: John Trevor Eyton, Master Mills held that a statute-barred debt is unenforceable at law and is therefore unprovable in bankruptcy:
[11] A debt which is statute barred is unenforceable at law and therefore may not be a provable claim in bankruptcy. A creditor ought not enjoy a windfall on an otherwise unenforceable debt simply because the debtor was assigned, voluntarily or otherwise, into bankruptcy. To allow the statute barred debt to be proven would permit the creditor to receive dividends on a pari passu basis with all other properly proven creditors who, but for the bankruptcy, would have been able to legally enforce their debts. Creditors must not be permitted to use the provisions of the BIA to effectively revive their enforcement rights and collect on statute barred debts. This is not the intention of the BIA which provides for the fair and orderly distribution of the bankrupt’s property among the creditors with proven and enforceable claims.
