Dealing with a debt collection agency is one of the hardest things you can do as someone in debt. You are already struggling with debt – which is painful enough. The next thing you know you are getting harassing calls that prevent you from sleeping at night.
The problem with the current blog posts on how to deal with collection agencies is that they are all written from a legal perspective. While this is a good thing we have found that most consumers do not properly understand how these rules work. It is first important to understand the rules that collection agencies (and businesses) must follow.
The collection agency rules are:
Collection agencies and businesses collecting debt cannot:
- Make any contact with you by phone or otherwise until they contact you by mail first.
- Collect more money than you owe the business or person who hired them.
- Make collect calls to you to demand repayment.
- Threaten or intimidate you or use abusive language.
- Call so often or in such a way that you or your family feels harassed.
- Call on a Sunday, or any day between 9pm and 8am.
- Lie about you (directly or indirectly) to your family members or to anyone that you owe money to.
- Give information, or threaten to give information, to anyone that could affect your job.
- Contact your employer, friends, acquaintances, family or neighbours. Unless they have guaranteed or co-signed the loan they are trying to collect. Or are looking for your address.
- Take you to court (unless the collector has taken on the debt from the company that you originally borrowed money from).
You have the right to:
- Ask collection agencies and businesses collecting debt to only contact you through a lawyer.
- Ask who is looking for repayment when they contact you.
What does the debt collection agency want?
The debt collection agency’s goal is to obtain two things. The first is to obtain payment or a commitment of payment. The other is to have the consumer re-affirm the debt.
Put plainly, a debt collector wants two things. One is to get paid and the other is to make sure they can continue to collect payments.
In other words, the collection agency wants to either collect money from the consumer or to ensure they can extend the statute of limitation so they can continue to try and collect a debt far past the statute of limitation’s initial timeline.
In Nova Scotia, the statute of limitations for the collection of debt is a 2 year period. We are not lawyers – but what this essentially means if you do not make a payment on the debt (or confirm in writing you owe it) they cannot actually bring you to court.
What should you do if being contacted by a debt collector?
If you are being contacted by a debt collector then you are most likely behind on payments. If it is a single account for a manageable amount of money then we recommend you call them to set up a payment plan. However, if you are overwhelmed with other debt then we highly recommend you consider more invasive forms of debt consolidation. The options you should consider are:
We’ve written articles on nearly every debt relief option that can save you from debt collectors and debt collection agencies. If you are not sure of where to turn to for help and want expert guidance, feel free to reach out. We would love to be that resource for you but understand we are not for everyone.
Collection Agencies Nova Scotia FAQ
How long can a collection agency collect on a debt in Nova Scotia?
The statute of limitations in regards to the debt in Nova Scotia is 2 years from the date of last acknowledgement of the debt. However, this doesn’t stop a collection agency or debt collector from contacting you and asking you to pay on the debt.
How do I get around a collection agency?
If you have the means to pay the collection agency and debt collector the money that is owed, we recommend you do so. This will usually be better for your credit report in the long run.
Otherwise, there is no magic way to get around collection agencies or the debt collector (s) that may work for them. We do recommend that if you do not have the means to pay them that you do not communicate with them. This will ensure you do not accidentally reset the date of the last acknowledgement.
Why you should never pay a collection agency?
We do recommend you pay the credit accounts you have owing, even if they are with a collection agency if you have the means. However, if you do not have the means to continue to make money payments to the debt collector then by paying them you will potentially reset the statute of limitations.
What happens if you ignore a debt collector?
If you ignore a debt collector working for a collection agency they can potentially pursue legal action against you. Now collection agencies must follow all rules that other creditors have to follow (and then some) if they try any collection activity.
What rules do debt collectors have to follow?
As indicated above, collection Agencies must adhere to the following rules according to the province of nova scotia.
Collection agencies and businesses collecting debt cannot:
- make any contact with you by phone or otherwise until they contact you by mail first
- collect more money than you owe the business or person who hired them
- make collect calls to you to demand repayment
- threaten or intimidate you or use abusive language
- call so often or in such a way that you or your family feels harassed
- call on a Sunday, or any day between 9pm and 8am
- lie about you (directly or indirectly) to your family members or to anyone that you owe money to
- give information, or threaten to give information, to anyone that could affect your job
- contact your employer, friends, acquaintances, family or neighbours unless they have guaranteed or co-signed the loan they are trying to collect or are looking for your address
- take you to court (unless the collector has taken on the debt from the company that you originally borrowed money from)
You have the right to:
- ask collection agencies and businesses collecting debt to only contact you through a lawyer
- ask who is looking for repayment when they contact you
Are you legally obligated to pay a collection agency?
You are not legally required to pay a collection agency or any debt collection firm unless there is a court order specifying as such. This typically only occurs once a collection agency or creditor takes legal action against you.
What can debt collectors take from you?
Debt collectors and debt collection agencies cannot take anything from you unless they obtain a judgement and an order to be able to seize property. If this occurs they can take items such as:
- Money in a bank account
- Put a lien against your property
This process does take several months though. We recommend reaching out for professional help far before this.
What is the lowest a debt collector will settle for?
Every debt collector and collection agency is different. Some collection agencies actually buy the debt from your creditors and may be willing to settle for less than a regular creditor such as a credit card company.
However, some debt collection agencies simply offer collection services to a creditor which means they follow rules outlined by the original creditor. That creditor may not want the collection agency to settle at all.
We recommend speaking with a debt professional prior to making any decisions as to which debt solution to take. Many have various impacts on your finances and credit report and must be reviewed carefully.
What is the limitation period in Nova Scotia?
In Nova Scotia, the statute of limitations for the collection of debt is a 2 year period. We are not lawyers – but what this essentially means is if you do not make a payment on the debt (or confirm in writing you owe it) a creditor or collection agency cannot actually bring you to court to try and collect on the debt.
This article was written by David Moffatt. A Senior Debt Relief Specialist with 4 Pillars Halifax. 4 Pillars has assisted in creating plans that have helped save Canadians over $1 Billion dollars of consumer and tax debt since 2002. We believe that no consumer should have to struggle with the stress of overwhelming debt. Our debt restructuring strategies can help you cut your debt by up to 80% with less than 3% of our clients ever getting into deep financial difficulties again.
We are proud members of the Canadian Debtors Association. We work for you, not your creditors.
If you are struggling with debt please reach out. It hurts to continue to suffer financially. 4 Pillars Halifax services Halifax, Dartmouth, Bedford, Sackville and the entirety of HRM.