By: Zane Roth and Jayson Schwarz LLM
This article and next month’s will look at debt collection from both sides of the ledger. Next month, we will explore your options as a creditor, today, let’s talk about how to stop creditors from bothering you.
If you cannot, did not, and, perhaps, will not, pay your debt, there are a few things you should know. First, you should know how to get collection agencies to stop calling you, and second, how to finally deal with debt you cannot repay.
A collection agency may only call you once you have received written notice of the debt; if you haven’t received a letter, then you don’t have to take the call. If you have received written notice of the debt, one way to get the collection agency to stop calling is to strike a deal. Often, you can work out a payment plan to pay off a reduced debt in installments or in a reduced amount in a single payment. However, if you are going to negotiate with an agency, please, never admit to owing the debt. You will see why below.
If you simply want the collection agencies to stop calling, send the collection agency a registered letter. First, you may say that you dispute the debt and suggest that the matter be brought before the Court. The creditor may determine it’s not worth the expense of going to Court and possibly write off your debt, or they may in fact start a lawsuit. In that case, you’ll likely wish you made arrangements to pay the debt when you could. Second, you can write and tell the collection agency to contact your lawyer, assuming you have one.
Once such a letter is received, the company can no longer contact you, and if they do, you can complain to the Ontario Ministry of Consumer Services. You can also file a complaint if the collection agency tries to collect more than what you owe, calls you more than three times a week without your consent, or if they are abusive, threatening, or if they exert undue pressure on you to pay.
Sometimes a creditor takes too long to demand payment, which means you may not have to pay. Generally, a person or company has two years to file a lawsuit to collect a debt, and the clock starts running as soon as that debt is incurred. The reason why you don’t want to admit to a debt, is because that may restart the clock. Similarly, payments towards a debt may also restart the clock. So, if more than two years have passed since you incurred the debt, and if you haven’t made any payments or otherwise affirmed or acknowledged the debt, you may get away without having to pay it thanks to the Limitations Act. You should know, however, that a creditor may nonetheless tell the credit bureau that you are a credit risk and affect your rating. Interestingly in that case you can force a credit clean-up.
Finally, if your debts are too numerous or too high, you may want to seek out the assistance of a credit counselor or bankruptcy trustee or lawyer, who can help in developing a plan to get you out of debt and stop creditors from bothering you. The first best option is to pay your bills as they become due. However, if that’s not possible, you now have options.
Many thanks to Zane Roth a former associate of the firm in the composition of this article.