Getting Collection Calls? 5 Things to Know About Debt Collectors
If you are like most people, you are not looking forward to receiving your post Christmas credit card bills. Hopefully, you will be able to handle the required payment, but what if you are like thousands of other Canadians and can’t?
If you are unable to make the minimum payment it is likely that your account will be transferred to a collection agency for collection action. This can result in threatening letters about going to Court and nasty phone calls to you and your friends and family. What should you do if you are getting collection calls? Here are 5 things to know about debt collectors.
Confirm Their ID
With the amount of scams taking place, both by phone and over the internet, it is more important than ever to confirm that the person you are talking with is not a scammer.
If you are receiving a collection call from a debt collector we recommend that you ask them to confirm the following information:
- The name of the person you are talking to
- The name of their organization
- Your account number
- The amount of the debt
- Who the debt was originally with
Ask For Proof That the Debt is Yours
One of your rights is to ask for proof that the debt is yours. In this regard we suggest that you request that they send to you evidence of the debt – such as a statement, letter, or account information.
In order to be liable for the debt you must have signed for it or agreed to it in some respect. Just because your spouse has a credit card debt does not mean that you are liable to pay for it; they must have your signature.
In other cases, you may have a similar name to someone else. If the debt is not yours you can challenge them and refuse to pay.
If you are confident that the debt is yours you can agree to a payment plan with the collection agency or you can reach out to a Licensed Insolvency Trustee (LIT) to discuss alternative options.
Understand That They Will Try to Bully You
What about if you are unable to pay even the minimum amount required? This will result in a late payment or missed payment notification on your account and will likely accelerate the collection pressure. This could take place in the following ways:
- Increased amount of phone calls at all times of day
- Calls to your family or neighbors or place of work
- Letters or voice messages threatening Court action and that you will go to jail
- Letters or voice messages threatening to garnish your pay
Collectors have a lot of experience collecting and know how to push your buttons in order to get you upset to the point that you make a payment just to stop the pressure.
It is important to understand that the vast majority of these tactics represent empty threats. Although unpleasant to hear, it is highly unlikely that a creditor will spend the money and the time to take you to Court.
The exceptions to this would be if the amount of the debt is large or if you are receiving collection calls from Canada Revenue Agency about income tax debt.
Pro Tip: If you owe tax and are receiving calls from CRA please contact us immediately. CRA has very powerful collection tools and may drain your bank account or garnish your pay in full. We have the ability to prevent that from happening.
Control How They Communicate With You
We often hear from people that their phone never stops ringing with collection calls. Even during our meetings with people, sometimes the phone rings with a call from a debt collection agency! That is enough to drive you crazy.
You may be wondering if collection companies are allowed to call so often. In British Columbia, the Consumer Protection Agency regulates when a collector can call. Specifically, they are able to call during the following periods:
- Monday through Saturday between 7am and 9pm
- Sunday between 1pm and 5pm
If you are not comfortable speaking with a debt collector then you have the option of requesting that they only deal with you or your lawyer in writing. In order to facilitate this you will need to send them a traceable request to not phone but rather communicate in writing. You can do this by sending them a registered letter, email or fax.
If the collection company does not comply with your request we recommend you contact Consumer Protection BC to complain.
Be Aware of Your Government of Canada Regulated Options
The Federal Government recognizes that sometimes peoples’ financial situation can get out of control. If you are unable to make the payments on your debt, or if the balance of the debt never seems to change, there are some powerful Federal Government options to learn about.
Both of the following options put a stay of proceedings into place which forces the collection calls to stop. Even the ones from the Canada Revenue Agency! Both of these options must be filed with the help of a Licensed Insolvency Trustee.
- Consumer Proposal – this allows you to make an interest free offer to your creditors, payable over time, at an amount that fits your budget that will eventually pay back a percentage of what is owed in full satisfaction of your debts. This has become the most popular way in BC and Canada to consolidate unsecured debt. It is the only way you can offer to pay back less income tax than you owe.
- Bankruptcy – sometimes this is the most practical option to put up a wall between you and your debts. It is not as bad as you might think as you are allowed to keep a variety of your assets which are classified as exempt from creditors. Please contact us for details.
Contact Us – We are Here to Help
If you are in a situation where you have accumulated an unmanageable amount of credit card debt, and other unsecured debt such as a line of credit, overdraft balance, or income taxes, please contact us at Chase & Associates. We are a CPA firm that has people licensed and approved by the Federal Government as Licensed Insolvency Trustees (LITs).
We can make the collection calls stop.
We offer a free confidential meeting, where we will take a look at your financial situation and provide you with feedback including what options might be available to you. Contact one of our convenient locations to make an appointment that fits your schedule. You will be glad you did!