How to Deal with Debt Collectors
Many debtors live in constant fear of their debt collectors. Some individuals dread the regular phone calls and letters that warn them about paying off their debts. A few individuals are even harassed by aggressive debt collectors and collection agencies.
So what are you to do when your debt collector comes calling?
Understand Your Rights
There are laws that protect debtors from harassment. In most provinces, credit agencies cannot contact consumers between the hours of 10 p.m. and 7 a.m. Additionally, Sundays are partially prohibited days in most provinces, as are statutory holidays, such as Canada Day or Boxing Day.
Furthermore, collection agencies must send you a written notice through regular mail (email doesn’t count) before they can speak with you in person. This notice must include:
- The name of the person or business (your creditor) that says you owe them money
- The amount of money that your creditor says you owe
- The name of the collection agency
- A statement that the creditor has asked that collection agency to collect the debt
After sending the notice, the debt collector must wait at least 6 days before they can try contacting you in person or by phone.
Can They Speak to Your Family?
Collection agencies cannot speak to friends, relatives, employers, or neighbours unless it is to verify employment or to get your address or phone number. They can only discuss the debt with those directly involved: you and your creditor.
Will You Have to Go to Court if They Threaten to Sue?
A collection agency cannot take you to court for the debt, unless your creditor agrees. In this case, you will have to go to court and the court will determine whether you owe the creditor.
If you do owe the creditor, the judge issues a judgment stating that you owe money. The collection agency may ask the court to enforce the judgment, which may result in seizing your bank account or garnishing your wages.
Can a Debt Collector Call You at Work?
Debt collectors cannot call you at work if you requested that they not do so. However, you must make alternate arrangements for them to contact you, and you must make sure they can contact you at that alternate number.
How Often Can a Collection Agency Call You?
After the debt collection agency has sent a notice about the debt, they may try to contact you in person. However, they cannot call you so often that it becomes harassment (more than 3 times in 7 consecutive days).
According to the Business Practices and Consumer Protection Act, harassment also includes:
- Unreasonable or excessive pressure
- Publishing or threatening to publish the debtor’s failure to pay the debt
- Intimidating or threatening language
A debt collector cannot speak with you, your family, or your employer in any way that causes distress, alarm, or humiliation.
What to Do if a Collection Agency Calls
While a debt collection call may seem intimidating, you can make the call smoother by following these steps:
- Ask who’s calling. Find out if it’s the original creditor or a debt collection agency. Record important information such as the name of the caller and the telephone number.
- Ask about your debt. Find out the amount, the creditor, and the date. Make sure these details are familiar and determine whether the debt is yours.
- If the debt is yours, pay the full amount as soon as you can. If it is not, inform the agency of the mistake.
- If you cannot pay the debt, explain why to the collector. Offer an alternate method of repayment (such as two or three payments or a series of monthly payments).
- If possible, give the creditor a small payment to show your commitment to paying the debt. Keep track of all payments you make to your creditor.
If a call with a collection agency does not go well, or if your creditor continues to harass you, speak to the supervisor at the debt collection agency. If that doesn’t work, complain to the Credit Counselling Services of Alberta or speak with a debt consolidator for additional legal steps to take.
Will You Go to Jail for Not Paying Debts?
Typically, the answer is no. However, you may go to jail if you did not pay court-appointed fines, including those associated with criminal behaviour. You may also face jail time if you are guilty of income tax evasion, and the Canada Revenue Agency (CRA) seeks your jail sentence. In these two circumstances, you face jail time not because your are in debt, but because failure to pay falls under criminal codes.