How to Deal With a Debt Collector

Navigating Encounters with Debt Collectors: A Comprehensive Guide

Dealing with debt collectors can seem daunting and stressful. However, understanding the role of a debt collector, your rights as a debtor, and strategies to effectively communicate can significantly alleviate the pressure. This guide will help you understand how to deal with a debt collector and provide tips on how to negotiate with a debt collector.

Understanding the Role of a Debt Collector

When an individual fails to make timely payments towards their debt, typically, the lender will attempt to recover the debt. If these attempts fail, the lender may resort to engaging a debt collector. Debt collectors can be internal departments in the lending company or external third-party agencies.

In some cases, the original lender may sell the debt to a collection agency, making the agency the new creditor. The rules and regulations governing the actions of these debt collectors can vary, depending on whether they are federally regulated or not.

However, irrespective of the collector’s identity, debtors are safeguarded by laws that dictate the collector’s interactions with them.

Initial Contact with Debt Collectors

Debt collectors are required to give you the opportunity to confirm the debt before initiating collection calls. The confirmation usually takes the form of a letter or email detailing the debt amount, the original due date, and the payments made so far. This step is crucial as it helps protect against fraud and miscommunication, ensuring the correct amount is being collected at the right time.

The Statute of Limitations on Debt

In many jurisdictions, laws prevent creditors or collection agencies from initiating legal action to recover debts that have been outstanding for a specified period. These laws, known as the statute of limitations, vary across provinces.

However, acknowledging the debt, making a payment, or even providing written confirmation can reset the statute of limitations. Therefore, it’s highly recommended to seek legal advice if you believe the statute of limitations applies to your debt.

Asserting Your Rights

As a debtor, it’s your right to verify the identity of the collector and the nature of the debt. Most importantly, you are protected against harassment and intimidation:


  • Collectors are restricted to making one call per day within specified timings.
  • They cannot contact you on statutory holidays.
  • You can specify the preferred mode of contact, and they must adhere to it.
  • They cannot distort information or employ manipulative tactics.
  • If any of these rights are violated, you can report them to your local Consumer Affairs office.



Effective Communication with Debt Collectors

When interacting with debt collectors, it’s important to limit the information you share. Providing too many details about your financial situation can lead to assumptions about your spending habits, which might hinder negotiations. Therefore, refrain from divulging additional banking or financial information or confirming any assumptions they have about you.

Negotiating with Debt Collectors

Debt collectors are often open to settling debts for less than the owed amount. However, it’s crucial to agree only to a payment plan that fits within your budget.

Start negotiations by expressing your inability to pay the full amount and offer a lower price. A good starting point is to offer 30% of your total debt. This leaves room for counteroffers and negotiation.

Ensure to get the final agreed settlement in writing. Verbal agreements can be rescinded later, leaving you in a difficult position.

If you’re uncomfortable with negotiating on your own, consider seeking help from a Licensed Insolvency Trustee. They can assist you in determining what you can afford and help negotiate with your creditors.

Debunking Debt Collection Myths

Understanding the truth behind common misconceptions about debt collection can help you better navigate your interactions with debt collectors.


Consumer proposal or bankruptcy stops debt collectors:
True. These legal actions come with protections against debt collectors, and all contact will cease.

Debt collectors can contact your friends, family, and colleagues:
True. They can seek your contact information but cannot discuss your debt with them.

You should avoid the debt collector and pay the original creditor:
False. Your debt may have been sold to the collection agency and paying the original creditor might not settle your debt.

Debt collectors can garnish your wages or take from your bank account:
True. However, this can only occur if you have signed a voluntary assignment or if they obtain a court judgment against you.

You must handle debt collectors on your own:
False. You can seek help from friends, family, or professionals like a Licensed Insolvency Trustee.

Remember, dealing with a debt collector doesn’t have to be a daunting task. By understanding your rights, making calculated decisions, and seeking professional help when needed, you can navigate this process with confidence.

Seeking Help

If you need support to negotiate with a debt collector or you’re looking for some help managing your debt, reach out to Bankruptcy Canada for a free consultation.

Debt doesn’t have to be a solitary struggle. By seeking help and opening up about your situation, you can find support and options to regain control of your financial situation.

Getting Answers to Your Debt Questions

If you have further questions about dealing with debt collectors or managing your debt, consider booking a free consultation. The more you know about your situation and your options, the better prepared you’ll be to take control of your financial future.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.