I received several letters from these guys..
When I finally decided to call back to find out what these guys wanted,
I was told that I had an old credit card bill that I never paid.

When I looked back they were right i totally forgot about it..
started dealing with them and at the end I was able to settle my account for half the amount owing.

at the end it wasnt a bad experience at all

I made this tutorial video to help you deal with collection agencies.

VIDEO - How to deal with collection agencies

Let me know what you think.

I found this short podcast that I did in 2007.. It still relevant. and gives some tips on how to take control with a collection agency if they call.

Podcast -Take Charge With Collection Agencies.

I stand corrected :) 2 years as of 2004...

The key is to get people back on track in the credit world in a few years. If they went by your recommendation a person could have bad credit for fifteen to twenty years if the creditor decided to sue you a month before the eight to twelve years was up.

I wish we didn't have it in Ontario. It is way too short. I'd say somewhere between eight and twelve years would be much better. I see six years as the a minimum that makes sense.

I wish we had the two year rule in Nova Scotia.

The new Limitations Act came into force Jan 1 2004 so debt that got defaulted before then is under the old limitation period and stuff after 2004 is two years. Given it is 2010 all debt will be stat barred as from the old rules as of Jan 1 2010.

People who defaulted in late 2003 would have been in a unique position that the debt the defaulted on December 2003 wouldn't be stat barred till January 2010 while someone who defaulted January 2004 would be stat barred February 2006.

There are some exceptions to pre-2004 debt where the limitation period can be fifteen years but it is not something that comes up with respect to consumer debt. Also Ontario student loans don't have SoL for the provincial component of the loan.

The limitations period was changed to 2yrs in Ontario a few years back.

ummm... I believe stat barred is 7 years. Credit reporting agencies will voluntarily remove the debt after 6 years. This isnt because they are nice guys but because they dont want to be caught with their pants down mistakenly going past the stat barred date.
Also, as a point of interest, if your debts are really high and youre drowning, then bankruptcy really is the method to go. You will get your credit back faster and be able to honour your ongoing living expenses. You will also have money available to you to start saving again and I mean a full bankruptcy and not a bankruptcy proposal which in my opinion is a waste of time for the consumer but a windfall for the trustees and creditors.

Credit Counselling Services and other such servicers, again benefit the creditor by squeezing out the last few cents out of you. Remember, the banks have an extremely low delinquency rate that doesnt even reach double digits... they make Billions in profits and charge exorbitant interest rates. So the idea of feeling guilty over a bankruptcy is ludicrous... just ask GM :)
Most of us work way too hard to spend the required time learning about the financial industry but believe me its not worth drowning over 5 years to repay your debts if your credits terrible anyhow. The banks wont do anything extra for you!