{"id":1212,"date":"2021-12-31T13:53:29","date_gmt":"2021-12-31T17:53:29","guid":{"rendered":"http:\/\/limitations.ca\/?p=1212"},"modified":"2021-12-31T13:57:25","modified_gmt":"2021-12-31T17:57:25","slug":"ontario-a-statute-barred-debt-is-unprovable-in-bankruptcy","status":"publish","type":"post","link":"https:\/\/limitations.ca\/?p=1212","title":{"rendered":"Ontario: a statute-barred debt is unprovable in bankruptcy"},"content":{"rendered":"<p>In<a href=\"https:\/\/canlii.ca\/t\/jdms5\" target=\"_blank\"><em> In re: John Trevor Eyton<\/em><\/a>, Master Mills held that a statute-barred debt is unenforceable at law and is therefore unprovable in bankruptcy:<\/p>\n<blockquote><p>[<a class=\"reflex-paragAnchor\" name=\"par11\"><\/a>11]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0A debt which is statute barred is unenforceable at law and therefore may not be a provable claim in bankruptcy.\u00a0 A creditor ought not enjoy a windfall on an otherwise unenforceable debt simply because the debtor was assigned, voluntarily or otherwise, into bankruptcy.\u00a0 To allow the statute barred debt to be proven would permit the creditor to receive dividends on a\u00a0<i>pari passu<\/i>\u00a0basis with all other properly proven creditors who, but for the bankruptcy, would have been able to legally enforce their debts. \u00a0Creditors must not be permitted to use the provisions of the\u00a0<a class=\"reflex2-link\" href=\"https:\/\/www.canlii.org\/en\/ca\/laws\/stat\/rsc-1985-c-b-3\/latest\/rsc-1985-c-b-3.html\">BIA<\/a>\u00a0to effectively revive their enforcement rights and collect on statute barred debts. \u00a0This is not the intention of the\u00a0<a class=\"reflex2-link\" href=\"https:\/\/www.canlii.org\/en\/ca\/laws\/stat\/rsc-1985-c-b-3\/latest\/rsc-1985-c-b-3.html\">BIA<\/a>\u00a0which provides for the fair and orderly distribution of the bankrupt\u2019s property among the creditors with proven and enforceable claims.<\/p><\/blockquote>\n<div class=\"paragWrapper\">\n<blockquote>\n<div class=\"bootstrap unselectable viibes-marker-toolbox\" title=\"Paragraph tools\" data-with-parag=\"12\"><\/div>\n<p class=\"MainParagraph\" data-viibes-parag=\"12\" data-viibes-start=\"11\" data-viibes-end=\"10\">[<a class=\"reflex-paragAnchor\" name=\"par12\"><\/a>12]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The statute barred debt is not extinguished.\u00a0 Its existence and the failure to voluntarily pay the debt may constitute an act of bankruptcy to support an application for a bankruptcy order, but contrary to the\u00a0<i>obiter\u00a0<\/i>of Newbould, J., the debt may not stand as a provable claim in bankruptcy.<\/p>\n<\/blockquote>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>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]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0A debt which is statute barred is unenforceable at law and therefore may not be a provable claim in bankruptcy.\u00a0 A creditor ought not enjoy a windfall on an &hellip; <a href=\"https:\/\/limitations.ca\/?p=1212\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">Ontario: a statute-barred debt is unprovable in bankruptcy<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[195,481],"class_list":["post-1212","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-bankruptcy-and-insolvency-act","tag-debts"],"_links":{"self":[{"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/1212","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1212"}],"version-history":[{"count":4,"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/1212\/revisions"}],"predecessor-version":[{"id":1216,"href":"https:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/1212\/revisions\/1216"}],"wp:attachment":[{"href":"https:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1212"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1212"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1212"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}