While debt is just another part of life for most Canadians, it can cause considerable stress when your debts start to spiral out of control.
Your disposable income can start to drain away and more and more of your wages can get subsumed by repayments and hefty interest rates.
If your financial circumstances cause you to default on your repayments, it can be even more stressful, especially when Debt Collectors show up on your doorstep.
The presence of Debt Collectors on your doorstep can be extremely intimidating.
And when they arrive at your home, they may make any number of threats in order to separate you from what little money you have.
Debt Collectors rely on their ability to make you act out of panic under pressure.
Don’t let them.
Here are some things you need to know about Debt Collectors.
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The rights of Debt Collectors vary by province
Every province in Canada has different legislation regarding the rights of Debt Collectors and what they can or cannot do in order to recover payments from debtors.
Some disreputable Debt Collectors may make threats to take action which may be permissible in another territory but is actually against the law in your home province.
For instance, in Alberta, British Columbia, Ontario, Nova Scotia, Quebec or Prince Edward Island, and have “properly disputed” your debt in writing, Debt Collectors cannot take any action against you whatsoever.
Take the time to get to know the legislation pertaining to the rights of Debt Collectors and debtors in your province.
It will allow you to dispute any claims and threats that may be made by Debt Collectors on your doorstep.
Debt Collectors cannot harass you or contact you at unreasonable hours
The role of a Debt Collector is to work with the debtor to find a way to repay a debt on which they have defaulted.
However, they should not have to resort to bullying and intimidation to do this.
Scare tactics (such as phone calls at unreasonable hours) are prohibited.
In Saskatchewan, for instance, Debt Collectors are unable to contact you between the hours of 8am and 9pm, and cannot make contact on Sundays or public holidays.
They cannot harass or intimidate you, your family, your spouse or your friends in the pursuit of collecting repayments, and while they can often contact you at work, you have the right to tell them not to.
Debt Collectors cannot garnish your wages without Court action
Many people who are in debt live in fear of Wage Garnishment.
This is where a Debt Collector or creditor takes debt repayments directly from your employer to recover what their debtors owe them.
They can even do this for self-employed debtors by approaching their clients and their own debtors for repayment.
However, if a Debt Collector threatens to do this don’t panic.
They cannot take this action without taking a very specific course of action which involves taking out a lawsuit against you and obtaining a special judgement from the courts.
If you live in New Brunswick, Debt Collectors cannot garnish your wages at all.
So be wary of any debt collector who threatens to do this overnight, and remember that they cannot send you any documents that appear to be from the court.
The court will always send documents to you directly.
And they very rarely take legal action against debtors
Still, even the thought of Wage Garnishment may be enough to keep some stress-prone debtors awake at night.
But hopefully you can take comfort from the fact that it’s extremely rare for Debt Collectors to take legal action against debtors.
In fact, Collection Agencies only sue in around 1 in 10,000 cases.
Debt Collectors don’t necessarily work for your creditor
It’s also important to note that a Debt Collection Agency doesn’t necessarily work directly for your creditors.
In many cases the agency actually buys the debt from your creditors at a fraction of what you actually owe.
This can actually work to your advantage.
It means that they may be amenable to you paying down less of the principal debt if you can arrange a repayment plan.
As long as they are able to make a profit on their investment, most will be happy.
What can you do about Debt Collectors?
Now that we know a little more about what Debt Collectors can and cannot do, the idea of them turning up on your doorstep will hopefully be a little less intimidating.
Nonetheless, you’ll want to be proactive in keeping them as far away from your home, workplace and loved ones as possible.
While there are many non-profit organizations out there that offer Credit Counselling services, the most they can do for you is set up a Debt Management Plan.
And while this may be helpful for many, it is a voluntary agreement and not legally enforceable.
However, a Licensed Insolvency Trustee can help you to take decisive action to get Debt Collectors off your back for good.
Don’t worry, you don’t even have to file for Personal Bankruptcy.
There are other ways to put a fast and decisive stop to threatening calls from Debt Collectors, Wage Garnishment and other punitive measures that may stop you from sleeping soundly at night.
It can also eliminate interest payments and other charges in their entirety, and even allow you to reduce your principal debt by up to 80%.
Under a Consumer Proposal, you can get debt-free in 5 years or less.
Want to talk about your options? We’re here to help!
Since 1999 we’ve helped hundreds of thousands of Canadians just like you to find the best Debt Relief option for their needs.
If you’re losing sleep over the idea of Debt Collectors turning up on your doorstep, we can advise you on the best option to send them packing.
Want to know more about the services we offer?
Call us today on (877)879-4770 to arrange a risk-free, zero-obligation and completely confidential callback.