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“If you don’t pay your debts, you’ll end up in jail”

Let’s get one thing straight off the bat – it isn’t a crime to be in debt! Despite what some collection agencies might have you believe, you won’t go to jail even if you get further and further behind on your payments.

Indeed, some unscrupulous collection agencies can be very creative in their threats to pressure you to pay back your debts. For instance, they can say things like: “We’re going to confiscate your family support” or “We’re going to tell your boss about your debt problems.” Such threats, which are obviously illegal, are clearly designed to frighten debtors and throw them off balance. That’s why it’s reassuring to know there are rules governing debt collection that are specifically designed to protect consumers against collection agencies using such questionable tactics.

Collection agencies have some rules to follow

Here are the main debt collection rules you should be aware of:

  1. The first contact from a collection agency should be in writing in the form of a “notification of claim” mailed through the post;
  2. In Quebec, the first phone call from a collection agency must not take place within five days of sending out the “notification of claim.” This time lag is six days in Ontario;
  3. In Quebec, collection agencies can only call debtors between 8 a.m. and 8 p.m. from Monday to Saturday inclusive, and in Ontario between 7 a.m. and 9 p.m. from Monday to Saturday inclusive as well as between 1 p.m. and 5 p.m. on Sundays;
  4. During such calls, collection agency representatives must disclose:
    • Their identity and the name of the collection agency they represent;
    • Their agency’s licence number;
    • The amount of debt claimed and the name of the creditor concerned;
  5. If you so request, the collection agency must provide you written details such as the outstanding balance of the debt, the date and amount of each repayment installment and copies of all supporting documents concerning the debt;
  6. A collection agency can only contact you once at your workplace unless you agree otherwise;
  7. A collection agency cannot communicate with any of your relatives or acquaintances (e.g. your family, friends or colleagues) except when:
    • the person in question has co-signed the loan you are struggling to repay;
    • the agent does not know your address or phone number;
  8. Your obligation is only limited to the amount of your debt, which means that no collection agency has the right to charge you additional expenses.

Regardless of how much you owe or how you incurred your debts, you should never feel threatened or intimidated if a collection agency contacts you. Under no circumstances is the collection agency entitled to blackmail you or make you feel guilty. If that happens, you have three years after such harassment to take your case to the courts and ask for damages.

While most collection agencies obviously try to play by the rules and act courteously, others, according to statistics compiled by the consumer protection office in Quebec (OPC – Office de la protection du consommateur), definitely employ a culture of intimidation. In fact, 8% of all consumer complaints to the OPC in 2012 concerned collection agencies.

So, if you ever feel that you’re being harassed or intimidated by a collection agency, rest assured that Ginsberg Gingras’ bankruptcy trustees can help you. For example, if you feel that you’re no longer in a position to pay back all your debts, you can submit a consumer proposal to your creditors. This action will not only put a stop to all debt collection measures against you but also lower the total amount of your debts and keep you out of bankruptcy.


Pascal Gagnon

CPA, CGA, CIRP, Licensed Insolvency Trustee & Privacy Officer

Official Office: Gatineau (Hull)
Phone: 819-776-0283

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