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.
Debt can be a symptom of any number of problems and life circumstances. However, it is important to understand that YOU ARE NOT YOUR DEBT.
At 4 Pillars Halifax, we'd love to discuss how we can help you become debt free.
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. The goal is to have a client make a payment on the debt but not to actually obtain payment, but to reset the period of time they can pursue legal actions if need be. In Nova Scotia, the statute of limitations for 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.
So the debt collectors’ goal is two-fold. One is to get paid and the other is to make sure they can continue to collect payments.
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:
- Credit Counselling (Article link)
- Debt Settlement (Be cautious – we wrote an article!)
- Consumer Proposals (Article link), or
- Bankruptcy (Article link).
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.
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 plans can help you cut your debt by up to 80% with less than 3% of our clients ever getting into deep financial difficulties again. If you are struggling with debt please reach out. It hurts to continue to suffer financially.