Debt Collection Agencies

Debt collection agencies are business enterprises that seek to collect repayment on debts which are owed by persons or legal entities. Typically, the collection agencies operate on behalf of the creditors and in exchange for a set fee or a percentage of the total due amount. Another type of agencies, referred to as debt buyers, purchase the creditors` debts at a reduced value and collect repayments from the borrowers.

In most provinces of Canada, the debt collection agencies should notify the borrowers that their accounts are turned over to them. Normally, the agency will contact the debtors in an attempt to collect their dues. The debtors will arrange their payments with the agency, not with the original business. They may still contact the creditor if they discover errors in their accounts. However, the debtors must notify both, the business and the collection agency about the found errors. They should do their best to repay the amount of money that is owed to the businesses. If this option is unavailable, the debtors must explain their financial situation in writing. Furthermore, they should propose an alternative way of repayment: either as a whole sum or in the form of monthly repayments. The debtors must get in touch with the collection agency immediately, in case that their financial circumstances change.

The debtors must be familiar with the rules that govern the conduct of the collection agencies. For instance, the agencies should abstain from any acts that are covered by the term harassment under the Canadian laws. Individuals who believe that the collection agency perform acts of harassment should keep track of the date, time, and frequency of phone calls and other acts. This information will constitute the basis of a formal complaint against the agency. The debtors must be aware that the collection agencies are prohibited from contacting them, in any form, more than three times per week with regard to debts owed to a single creditor. They should contact the debtors after 7 am and before 9 pm during the work week. The agencies should abstain from calling when the debtors are on a holiday and before 1 pm and after 5 pm on Sundays. Moreover, they may not get in touch with family, friends, and employers for any information, except for the contact details of the debtor and some other limited exceptions.

The debtors should deal with collection agencies in a timely and respectful manner. Avoiding their phone calls and other attempts for communication does not resolve their financial problems. The agency might proceed with a legal action against the debtors. On the other hand, individuals should not make commitments that they cannot possibly keep. They should do their best to explain the reasons why certain arrangements are inadequate for their financial circumstances. If a debtor is unable to negotiate acceptable conditions with the agency, he can turn to a licensed bankruptcy trustee for assistance. The trustee will offer a free initial consultation and analyze the financial situation of the debtor. Furthermore, the bankruptcy trustee will present various debt management alternatives that are available in the particular circumstances of the debtor.

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