debt collection laws

Debt Collection Laws in BC

Money is a stressful subject for just about anyone, and if you add debt and frequent collection calls from creditors to the equation, that stressfulness just gets worse. Anxiety caused by debt collection can impact more than just your finances, including your relationships, health and daily life.

Debt collectors can be intimidating and may use the fact that not many Canadians understand the laws around debt collection when they try to collect money. If you are getting calls from collectors that are confusing and stressing you out, one way to ease your anxieties might be to have a better understanding of debt collection laws in British Columbia.

Debt laws in BC cover areas like harassment, communication rules, costs, legal proceedings, and more. These laws set out clear rules on what is okay and not okay when it comes to debt collection practices.

The Debt Collection Timeline: How Long After a Debt Can Collectors Take Legal Action?

In British Columbia, there is legislation in place called the Limitation Act. This act shows us how long after a debt is incurred a debt collector can take legal action against you. There is a basic liability limitation period of two years, which is defined by either:

  1. The date that an unsecured debt was incurred; or
  2. The date of the last provable acknowledgement of the debtor. This type of acknowledgement is defined as either a payment being made on the debt (no matter how small), or if there is any written confirmation of liability (including all e-communications such as emails).

Basically, if it’s been two years (or more) since the debt was either incurred, paid towards, or acknowledged, the creditor can no longer take legal action against you in an attempt to get you to pay.

But if any of these events do occur, the limitation period resets. It is also important to note that if a person makes a payment or a written acknowledgement of the debt outside of the statute of limitations, it does not restart the limitation period. This means that timing is very crucial in these cases, both for yourself and for the debt collectors.

Are there any exceptions?

Of course, there are some exceptions to the ‘rule’ of the two-year limitation period. For example, here are some types of debt that are not subject to this limitation period:

  • Civil claims that enforce a monetary judgement;
  • Arrears of child or spousal support;
  • Debts owing to government bodies like student loans or the Canada Revenue Agency;
  • Legal claims (e.g. damages due to a title of property, assault, etc.)

Communications With Debt Collectors

There are rules that apply to debt collectors and collection agencies, and knowing these rules might be helpful to know if you’re getting calls that are making you uncomfortable.

Debt collectors cannot communicate with you in a way that constitutes harassment, which can look like the following:

  • Using profane language;
  • Using excessive or unreasonable means to put pressure on you (the debtor);
  • Threatening to publish your failure to pay the debt owing.

Debt collectors also cannot break criminal laws. For example, they cannot:

  • Threaten to harm you or your property;
  • Abuse their authority to get money from you;
  • Convey false information with the intent to alarm you.

Debt collectors also cannot deceive you in any way. This could look like a debt collector falsely representing themselves and lying about their identity, either verbally or through the written word. They also can’t ask you to pay more money than what is actually owed on the debt itself.

A debt collector also needs to be sure to send written notice about the debt before they call you, and need to wait 5 days after sending the notice before calling. There are even certain times of the day and days of the week that have limitations.

They cannot call…

  • … Before 7am or after 9pm from Monday through Saturday.
  • … On a Sunday before 1pm or after 5pm.
  • … On a statutory holiday at any time.

There are also strict limits on whether or not a debt collector can contact friends and family members. A collector can only contact them to request your home address, phone number, or email. There are two exceptions to this rule, listed here:

  1. The person being contacted has guaranteed the debt;
  2. You’ve given permission to the collector to contact the person about the debt.

How to Deal with a Debt Collection Agency

If you have been contacted by a creditor and informed that they are going to transfer your debt to a collection agency, your first step should be to do what you can to avoid your debt going to collection. Call your creditor and see if an arrangement can be made. If you cannot pay, try to be honest about your circumstances.

If your debt has already been transferred to a collection agency, you will need some information. You should go through all your invoices and bank records to verify and list the following information:

  • The debt collector’s name;
  • The collection agency;
  • Any necessary contact information for the collector;
  • The total amount of money owed;
  • Who the payee is; and
  • The start date of the incurred debt.

If your debt has been acknowledged, it is recommended that you:

  • Always request receipts and payment statements;
  • Avoid paying in cash, to ensure that your payments can be documented;
  • Make payments through the collection agency rather than contacting the creditor.

Being called by a debt collection agency can be very stressful, but remember, you have rights and options at your disposal. If you have more questions and concerns and would like to talk to someone about your worries surrounding debt collectors, we can help you.

 We Are Here To Help

If your finances have gotten to the point where your debts are in the hands of collection agencies, you need to seriously consider getting some assistance. Here at Chase and Associates, we have helped many honest people regain control of their financial lives.

We offer a free consultation where we will gain an understanding of your situation and provide you with some information about practical options to improve it.

For example, there is federal law that allows you to consolidate your unsecured debt through a Consumer Proposal at zero percent interest. This will also stop the debt collector from phoning!  A Consumer Proposal has become the most popular way to gain debt relief in Canada.

Contact us today for a consultation and take control of your financial life once again.

Len Hiquebran, CPA, CA, LIT

After completing my articling at a local accounting firm, I spent some time working in industry as a controller of a logging company. Subsequently, I joined Derek L. Chase & Associates Ltd. in 2017 and began working in the insolvency field. In June 2020 I completed my studies and was granted a license by the Federal Government to be a Licensed Insolvency Trustee.