Dealing with Collection Agencies

What are your rights and responsibilities when dealing with collection agencies?

The Wolf at the Door: What to Do when Collection Agencies Come Calling

A practical guide for dealing with collection agencies and your debts, from Canada's top expert, Mark Silverthorn.

This book is now available on Amazon.ca.

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You're behind in your payments. Debt collectors are calling. What are your rights? How do you stop collection calls? What are your responsibilities? How should you be dealing with collection agencies?

First and foremost, DON'T GET EXCITED.

The people that you owe money to, your "creditors", have a right to try and collect that money. If they don't talk to you, how can they know your situation?

That being said, there are definite rules that collection agencies need to follow.

Collection agencies rules: how can you stop collection calls?

Get familiar with the collection agencies rules. Knowing what debt collectors can and can't do and what you can and should do will help you deal with collection agencies. Below we provide a partial list of the rules for Ontario. The legislation is similar (not identical) in other provinces and territories.

• Collection agencies may not harass you or your family. Calling you once or twice a day is acceptable. Calling you and your family ten times a day is harassment. If you believe a collection agency is harassing you, keep a record of the time, date and frequency of the calls. If you decide to make a formal complaint against the collection agency you will require this information.
• Collection agencies may not call you on a statutory holiday, on a Sunday before 1 pm or after 5 pm, or on any day before 7 am or after 9 p.m.
• Collection agencies may not contact you (by phone, voicemail, or e-mail) more than three times in any seven-day period on behalf of the same creditor.
• Collection agencies may not contact your friends, relatives, neighbors or employer for any information other than your address or telephone number, with limited exceptions. These involve special cases, when, for example, someone has co-signed for a good or service you have purchased.

You should deal with collection agencies in a forthright and professional manner. Try to treat them the way that you like to be treated yourself. Don't allow them to bully you into making commitments that you know you cannot keep. If you do make a commitment - keep it. If you cannot, be certain to explain to the agent why you couldn't.

Ignoring collection agencies' attempts to contact you will not help you solve your problems: it might stop the collection calls - true, but beware that if they cannot reach you, they may simply proceed with the legal action.

How should you deal with collection agents? Here's our three step plan:

First, don't ignore them. They won't just go away. Talk to them, and explain your situation. If you are not working, or can't pay them, tell them that. Don't have a long discussion with them. They want to keep you on the phone and upset you so you will pay them money. Don't play that game. Tell them your situation, and then hang up.

Second, if you can pay them, tell them what you can afford, and offer to send them the money. If you can afford $200 per month, offer to send them $200 per month. They may ask for $400, but never commit to pay more than you can afford.

Finally, if you can't pay them, it's time to consider your options. Debt problems will not simply go away on their own. Bill collectors are calling because you owe money. If you eliminate the debt, you eliminate the phone calls. Use our Debt Options Calculator to estimate your monthly payment if you were to find a way to actually eliminate your debts.

If your money problems have become too big to deal with them yourself, and dealing with collection agencies is more than you can handle right now, then seek professional help. Each of our consumer proposal administrators and our licensed bankruptcy trustees provides a free initial consultation. They will analyze your situation, possibly advise you on how to stop the collection calls, and explain the debt management solutions available to you.