How does the passage of time affect an unpaid account?
If you do not make a payment to your creditor then there will be consequences—and in some circumstances very quickly. In some situations where you fail to make a payment your creditor might be able to seize monies in your bank account under what is called the right of set-off.
This can happen where you fail to make a payment on a credit card, personal loan, or line of credit and you have a bank account at the same financial institution. Your financial institution can simply take monies out of your bank account at that financial institution to make your overdue payment.
As your account remains unpaid you can anticipate the following: 30 to 60 days overdue: At this point you should anticipate that you will receive collection notices and collection calls from your creditor. Six months overdue: By this stage your account will receive an R9 rating which is the worst possible rating. Typically, at this time your creditor has forwarded your account to a collection agency. Where a creditor chooses to sue a consumer it will likely do so where the account is between six months and two years overdue
Two years overdue: If your creditor does not commence a lawsuit against you within two years of the date of your last payment then it might be difficult for your creditor to recover any monies from you. Seven years overdue: By this time under Ontario law any reference to your unpaid account must be removed from your credit report.
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