Various tax implications can arise when a debt becomes statute-barred. So what is statute barring and when can it be a problem?
In simple terms, a debt is statute-barred when it has reached a statutory limitation period where it can no longer be legally recovered by creditors.
Specifically, each state and territory in Australia contains its own "statute of limitation" provisions that provide a procedural basis for a lawsuit for non-payment of a debt, including a time limit, which can be used as a defence against the claim from creditors.
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