Archive for Category 'collection agencies'

Question:  I live in Ontario, and the collection agency said that the debt occurred in 1996 and was written off in 1998. I do not think this was an unpaid debt, but after all this time what can I do? How can I prove that it was or was not paid now?

Can the collection agency still come to me after this many years?

Can they put a judgement against me after all this time, and will this affect my current credit score?

If this turns out to be an old unpaid debt, can I settle for a lesser amount?

Thank you

Answer: You have a number of options.  First, you can do nothing.  It is highly unlikely that a collection agency will take you to court for a 12 year old debt.  In fact, it is possible that the Statute of Limitations has expired on the debt, although you would need to consult a lawyer for more information.  (Here’s a book that may help: The Wolf at the Door: What to Do When Collection Agencies Come Calling).

You can also negotiate a settlement with them, if you so choose.  However, to start, you should request proof that you owe the money.  Given the age of the debt, they may not have the original paperwork, and in fact you may not even owe the money, so getting proof of the debt is your first step.

Question: A collection agency called and told us that if they don’t get payment by 3pm the following day they would proceed. When we asked what this meant, the agent replied “I don’t know, I’m not a lawyer” What does proceed mean??

Answer: Most of the time it doesn’t mean anything.  A collection agent’s job is to collect money, so they will tell you whatever they think will help them collect money.  If a collection agent tells you something, and then can’t explain what it means, it’s likely that that means they won’t be doing anything.

A collection agency can phone you and send you letters.  If that doesn’t work, they could “proceed” to take you to court and attempt to get a judgment and garnishee your wages.  However, court actions cost money, so that’s a last resort for a collection agent.

Also, they know that if they do start a wage garnishment, it is likely that you will file a consumer proposal or bankruptcy to stop the garnishment, so there is little point in them forcing the issue too far.

For more information, please see our article on dealing with collection agencies.

Question: Can a collection agency working for the bank sweep your entire bank account every payday?
I am dealing with an overdue overdraft account and made arrangements for weekly payments. I was 2 days late with a payment and they swept my entire account. I thought that worse case, they can only take half? They have been repeatedly sweeping it, even before the late payment.
I need to know if they can take everything and leave us nothing to live on? Since every other time it was swept they have returned it.

Answer: Yes, as you have observed, a bank or collection agency can take money from your bank account.

The immediate solution is to open a new bank account at a new bank (where you don’t owe any money).  You can then deposit your paycheque in the new account.  Since the old bank and collection agency is not aware of the new account, they can’t automatically seize funds from it.  They would require a court order to seize funds from the new account.  (Your current bank doesn’t need a court order, since the money is sitting in your account at their bank).

Of course opening a new account is only a temporary solution.  The collection agency can still pursue you for the amount owed.  If you have other debts, it may be prudent to consider a permanent solution, such as a consumer proposal or a bankruptcy.

Question: My problem is that a school that I attended sent the bill I owed to a collection agency. This collection agency and I came up with a payment plan but it turns out to be too much for me to handle right now. I asked to continue paying what I am paying now but only once a month instead of twice a month. The collection agency told me that the party they are collecting for will not take less than 10% in payments because the debt is almost 5 years old. I can’t do that and when I told the agent that I couldn’t he said that if the school doesn’t get what they want in payments then they may take back the debt from this collection agency and proceed with a judgment against me like garnishment etc. Do they have the right to tell me what I have to pay them? I have heard that they must accept whatever I give them and if they don’t then I can sue them and get this debt erased?!?!

Answer:  Unfortunately, no, you cannot simply offer whatever you want to a collection agency and force them to erase your debt.  If that was true, everyone would simply offer to pay $1 to every collection agent that called, and if they did not accept their debts would be eliminated.

A collection agency’s job is to collect.  If they don’t think you are paying fast enough, they can return your account to the original creditor, or they could pursue you further by attempting to garnishee your wages.  In practice, in most cases, if you are paying something reasonable, it is unlikely that they will take you to court.

For now, your best option may be to simply keep sending them what you can afford.  As long as they continue to accept the money and not take you to court, you have a chance to continue making payments.  If they refuse payment, or if they do start court proceedings, it will then be time to consider your other options for dealing with debt.

Question: Is there a statute of limitation on how long a bill collector keeps your file open.

Answer: The Statute of Limitations is provincial legislation, so it varies from province to province and state to state.   On Ontario for certain debts it’s two years.

NOTE: That doesn’t mean that after two years the debt goes away.  It simply means that if the creditor sued you, your defense would be that you have not made payments for two years, and therefore they would not be able to get a judgement against you.

Practically, bill collectors prefer to only pursue recent accounts, since those are the accounts that they will have the most potential success in collecting.

Question: Hello.  I am hoping you can give me understanding of a situation with the bank – on a corporate bank account. The corporation bank account was given over draft protection by the bank when it was opened in 1997.

I have researched and found the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B
In Ontario the Statute of Limitations on debt collections is two years.

The Initial Revenue Canada GST Demand Notice was served on the bank for the Corporation Account on Wednesday, November 16, 2006.

The corporate account was $4,000 in overdraft at the time of the Demand Notice.

The Corporation, ceased business on November 16, 2006 due to actions of Revenue Canada.

There is no regular income since that date for the Corporation. My sole source of livelihood as Vice President of the Corporation ceased that day as well. (The President of the Corporation is my ex husband and he is no where to be found)

Just as an added measure Revenue Canada served the bank again on March 24, 2007. No Clue why.

I am currently being harassed by the 5th collection agency for the bank. Risk Management is calling and leaving threatening messages. I have kept a record of them (dates and times).

I have researched the Government information in Ontario and I found, The Ontario Ministry of Government Services consulted the collection industry to develop a standard to be followed by all collectors. Having a standard also allows the public to have a better understanding of what collection agencies can and cannot do. The regulations forbid collection agencies from:

“Using threatening, intimidating, or coercive language, or using undue, excessive, or unreasonable pressure”;

I have noted the dates and times of all the threatening and intimidating messages from

Tuesday, Jan. 13, 2009 – 8:30 am
Wednesday, Jan. 14, 2009 – 7:30 am
Friday, Jan. 16, 2009 – 10:45 am
Tuesday, Jan 20, 2009 – 12:26 pm
Monday, Jan. 26, 2009 – 8:17 am
Wednesday, Jan 28, 2009 – 7:31 am
Tuesday, February 3, 2009 – 12:25 pm
Wednesday, Feb 11, 2009 – 3:15 pm

The bank also had a lien against my house and it was removed in November 2008, coinciding with the initial date in November 2006.

And now I was threatened by the collection agency that they are turning this matter over to their legal department to look at Default of payment. I was also threatened they would look at the assets for the Corporation. There are none. Been there done that with Revenue Canada in January 2008 in court.

And the Collection agency in the same phone call then threatened my personal property if I did not return their call.

The time period is now over 2 years since Revenue Canada served the bank and ceased corporate business – the amount owing to TD Canada Trust is now 8000.

The Corporate Bank accounts are still frozen at this date. Nothing has changed .. Stage one was a request to have an audit from Revenue Canada, which was just completed at the end of 2008 and now Stage 2 is the Revenue Canada GST audit is complete then I am hoping to move forward and settle with Revenue Canada.

In the meantime, how do I handle the bank and their latest Collection Agency? May I write them? They are aware of the Revenue Canada action already and yet they continue to harass me via telephone.

How do I stop the bank and their current Collection agency Risk Management? Are either aware of the Statue of Limitations? Do I have any rights with this, as this is a corporate matter and if so what are they?

Thank you your time and expertise.
Tired from it all.

Answer: You are in a very difficult position.  The Statute of Limitations may provide some relief, but it is necessary to consult with a lawyer experienced in these matters to develop a course of action.  Here is a link to a lawyer that works with debtors to deal with collection agencies.

Question: When I was younger I messed up with credit. I had a join CC and some other department store credit cards that at that time I ended up maxing out and with no income just stopped making payments. That was some 7-8 years ago.

Well things are looking up now, and I want to get my credit back on track. All this time I have still maintained just one credit card that I have kept current without issue. However, on pulling my credit report today I have found 2 collections for the department store ones (CND Tire and Sears) , and one for Capital One credit card, which to my shock is now sitting at just over $11k. The last balance I recalled having on it was for about $7k back in 2003 I think. The other two together amount to $4900.

So I am looking at about a total of $16k in bad debt on my credit against my one credit card that is perfect. This is based on Trans Union info at the moment. Equifax online wouldn’t generate my report right away, so I have to wait till Monday to find out what might be on there.

There is no way I can cover $16K any time soon and I need to get this settled fast. I don\’t want to do a consumer proposal as that is just as bad as declaring bankruptcy with a ding to last 3 years instead of 7, and I don\’t care to get my current good credit card involved.

I have gotten numerous offers from the capital one collection agents to settle on my balance for something like $5000 to clear it.. but to tell you the truth, I don’t trust collection companies. I think I will make that payment and then they will start harrassing me to collect on the rest of the balance.

I currently have about $6000 that I can use to pay down my debts and clean up my credit history. I want to fast track this cleanup though, and would like to know if it isn’t unheard of to contact these people individually who say I owe them and offer them something like $0.40 on the dollar with one single payment and agree to remove it from my credit history, or at least show it as paid. If I get them to agree to this, will they, or do they, usually honor it? Will it show up on my credit history as cleared? Should I get them to send me something in writing to agree to this before I proceed with payments?

After this I guess I will be busy getting secured credit cards and building up more of a positive profile.

My goal is to get this turned around in 6 months. Am I dreaming? Or can it be done?

Answer: The advantage of a consumer proposal is that it’s a legally binding settlement; once accepted, the creditors cannot change their mind later.  However, you are correct, there is a note on your credit report that remains for three years after the proposal is completed.

Another possible option, if you want to propose a lump sum settlement to just the credit cards that are delinquent would be to use a lawyer to negotiate the settlement.  That way you get a legally binding settlement, on terms acceptable to you, with less impact on your credit report.

Question: I have a situation that began in November 2006, with Revenue Canada GST. They froze my Corporate bank account with the bank.
The bank account was 4,000 in over draft at the time.

The bank, over the past 2 years, has sent collection agency after collection agency to collect the money from me as my corporation could not carry on business and the bank wanted to be reimbursed the outstanding amount.

In April 2007 the bank also put a lien against my house, (I had no knowledge of this action at the time) but the bank has been subsequently released the lien in October 2008 and papers arrived stating the release of the lien.

Each collection agency, for the bank, once they knew of the situation of the ongoing Rev Can dispute, only required paperwork to prove what I communicated to be true, which was provided.

On the last collection agency, they required the actual copies of the demand notice from GST, that were served to the bank in the first place, which was provided and they ended their barrage of letters and phone calls. They assured me the bank would now no longer harass me.

However, not more than 4 days later a new collection agency was hired, and now they are saying settle or get dire consequences, or get a lawyer to write a letter of direction that the account will be paid when everything has been settled with Revenue Canada and Revenue Canada GST which could be another year down the road. Who knows with Rev. Can.

Of course the amount of money owed to the bank has doubled in 2 years and it is now close to 8,000. The bank is continuing to try and collect their money – However, due to my business being in limbo and/or suspended, and me without any regular income (I had to remortage my house and live off the equity in the interim) it is difficult to pay anything toward the bank, let alone settle. Which the latest collection agency is pushing hard to do.

IS there a statue of limitations in a case like this?? Would it be in effect as of this date of writing, if there is?

What is any suggested recourse. All the other collection agencies for all the corporation suppliers I had been dealing with, stopped a year ago with their ongoing collection attempts.

The bank is the only one that continues to use fear and negative tactics and intimidation. Which on some days being a single mom of a college student is not something easy to handle.
The bank is the only one that continues to use fear and negative tactics and intimidation. Which on some days being a single mom of a college student is not something easy to handle.

The outcome with Revenue Canada is yet to be determined, as they just completed the Forensic audit that was negotiated for them to proceed. (It took them over a year to complete). It is a step closer to resolution as the GST will now re-audit their errors in their initial audit that started this whole process.

In the meantime I have a bank that is like a little terrier with a bone … Any solutions please or advice or guidance and pointing me in the correct direction. I frankly do not need any more emotional trauma than I have been already experiencing with Rev Can for the past 7 years.

Thank you for your time ….

Answer: Yes, in Ontario the Statute of Limitations on debt collections is two years.   If you do not have regular income, the collection agency can’t garnishee your wages (since you don’t have any).  The best course of action will probably be to settle with Revenue Canada, and then once you have a stable income, make a settlement with the bank.

However, there are other options, including perhaps a consumer proposal, depending on the equity in your house and your projected future income, so we suggest you contact a trustee to review your situation in detail to determine the best course of action.

Staying Optimist in Ontario

Question: Hello, I am debating how to go about initiating a conversation with a Bank about settling an outstanding loan in my Wife’s name.

The loan was from a previous Marriage and her Ex skipped out on paying for a vehicle that he was obligated to pay for. She sued him and won. He claimed bankruptcy.

So, now that we have out life together (house, etc…) I would like to get this outstanding debt taken care of for her because she deserves to have it off her mind. My question(s) are:

- What is the best way to initiate conversation? I was thinking of having my accountant call the Bank. Will the bank talk about the debt with a CA on behalf of a client?

- An outside collection agency offered (her Ex) to bring the debt down from 10,000+ to $6500.00 which was not payed. The van was then repossessed. How much should I come in at to start negotiations? I was thinking $2000.00?

Your advice is greatly appreciated as I am somewhat lost here, but would love it if I could do this for my wife for Christmas as it weigh’s heavily on her.

Thanks Again

Answer:  If the account is in the hands of a collection agency, the starting point would be to contact the collection agency.  It is possible that they will only deal with your wife, since the debt is in her name.  To start, she could contact them and simply offer to settle for, say, $2,000.  Since this debt is very old, it is possible that the collection agency will consider this to be “found money” and settle for that amount.

There are lawyers that specialize in negotiating settlements with banks.  Here is a link to a lawyer that could provide further information, and would negotiate the settlement on your wife’s behalf.

Question: My boyfriend had to drop of his program at college — he was not notified but apparently did not withdraw properly. His mom was contacted through a third-party collection agency telling him he owed them $1400. He is currently on Unemployment Insurance and this has come up at a bad time. He is also about to go back to school this coming September so he is not going to be wealthy any time soon. He did not attend one day of this semester they are forcing him to pay for. He spoke to the collection agency recently and they asked him to at least put down $100 the end of the month. He said he would but still has not. I realize the Statue of limitations is 2 years in ontario, so how can he tell the specific date that the debt was sent to the collection agency? What advice do you have for him?

Answer: You are correct, the Statute of Limitations in Ontario is calculated as two years from the last payment on the debt.  If he has not made any payments, the calculation would start from when he received the loan. The rules are complicated, so for further information he could contact a lawyer specializing in collection agency issues.

If he is currently not working, they cannot garnishee his wages, so his best option may be to simply wait until he is working to deal with the debt.  He could speak to a not for profit credit counsellor for more information.