Dealing with constant collection calls can be overwhelming and stressful. If you're facing this situation in Canada, you're not alone. Many Canadians struggle with debt and find themselves on the receiving end of persistent calls from debt collectors. Understanding how to stop collection calls in Canada is crucial for maintaining peace of mind and taking control of your financial situation.
This article will guide you through effective ways to handle collection calls and protect your consumer rights. We'll explore your rights as a debtor, discuss how to communicate with collection agencies, and outline legal methods to stop unwanted calls. Additionally, we'll touch on debt relief options, including debt repayment strategies and consumer proposals, to help you address the root cause of collection calls and improve your credit score in the long run.
Understanding Your Rights as a Debtor
When dealing with collection calls in Canada, it's crucial to know your rights as a debtor. This knowledge empowers you to handle interactions with collection agencies effectively and protect yourself from unfair practices. Let's explore the key aspects of your rights under Canadian law.
Know the Collection and Debt Settlement Services Act
The Collection and Debt Settlement Services Act (CDSSA) in Ontario sets out rules that collection agencies must follow. This act aims to protect debtors from unfair collection practices. Under the CDSSA, collection agencies are required to send you a written notice before they can contact you to demand payment. They must wait six calendar days after sending this notice before they can contact you.
If you inform the agency that you didn't receive the written notice, they must stop communicating with you, send another copy to the address you provided, and wait six more days before contacting you again. This gives you time to prepare and better understand your situation.
Recognize Illegal Collection Practices
It's important to know what collection agencies can and cannot do. They cannot use threatening, profane, or intimidating language when communicating with you. They also can't use excessive pressure or harass you in any way. Collection agencies are prohibited from calling you between 9 p.m. and 7 a.m. on weekdays and Saturdays, and they can only contact you between 1 p.m. and 5 p.m. on Sundays.
Furthermore, they can't contact your employer except to confirm your employment details, and they're not allowed to discuss your debt with family members or friends unless you've permitted them to do so. If you believe a collection agency has violated these rules, you can file a complaint with Consumer Protection Ontario.
Understand the Statute of Limitations on Debt
The statute of limitations on debt in Canada varies by province and type of debt. This is when a creditor can legally enforce the collection of a debt. For example, in Ontario, the statute of limitations is generally two years from the last payment or acknowledgment of the debt. After this period, while you still owe the debt, creditors cannot take legal action to collect it.
However, it's important to note that specific actions can reset the statute of limitations. Making a payment, acknowledging the debt in writing, or entering into a payment plan can restart the clock. Also, some types of debt, such as government debt or court judgments, may have different rules regarding limitations.
Understanding these rights can help you navigate collection calls more confidently and ensure that you're treated fairly in the debt collection process.
Effective Communication with Collection Agencies
When dealing with collection agencies, it's crucial to communicate effectively to protect your rights and find a solution. Here are some strategies to help you handle these interactions:
Request Written Communication Only
One way to stop collection calls is to ask the agency to communicate with you only in writing. This is sometimes called a "cease and desist" request. To do this, fill out a "request for communication in writing only" form and send it to the debt collector with proof of delivery, such as a fax transmission report or registered letter receipt. Once you've done this, they're not allowed to contact you by phone and must communicate in writing (mail or email). This approach can help reduce stress and give you more control over the situation. However, the creditor can then take court action, such as obtaining a judgment against you for the debt owed.
Verify the Debt's Legitimacy
Before agreeing to any payments, confirming that the debt is yours is essential. When a collection agency contacts you, get as much information as possible about the debt: who it's owed to, how much it's for, and when it started. Compare this information with your records to ensure its accuracy. If you've already paid the debt, provide proof of payment to the agency. If the debt isn't yours, inform the collector and contact the original creditor to confirm the information. This step is crucial in protecting yourself from potential fraud or miscommunication.
Negotiate payment plans
If you confirm the debt is legitimate, you can start a conversation about repayment. Collection agencies are often willing to negotiate, especially early in the process. Before entering negotiations, calculate a lump sum or monthly payment that fits realistically into your budget. A general rule is to start by offering 30% of your total debt, which gives you room for counter-offers. You can also discuss setting up a monthly payment plan if it helps you pay the agreed amount. Always get the final settlement in writing from the collection agency to avoid misunderstandings in the future.
Legal Ways to Stop Collection Calls
There are legal methods to end this stressful situation when dealing with persistent collection calls. These approaches can help you regain control and protect your rights as a consumer.
Send a Cease and Desist Letter
One effective way to stop collection calls is to send a cease and desist letter. This formal request demands that the collection agency only communicate with you in writing. To do this, draft a letter clearly stating your request and send it via registered mail to ensure proof of delivery. In the letter, provide an address where they can contact you or your legal advisor. Once received, the agency must comply with your request and stop phone calls. This method gives you more control over the communication process and reduces the stress of unexpected calls.
File a Complaint with Consumer Protection Authorities
If a collection agency violates your rights or continues to harass you, you have the option to file a complaint with consumer protection authorities. In Canada, each province has its own consumer protection agency that oversees debt collectors. These agencies have the power to investigate complaints and can even revoke a collector's license if they find violations. To file a complaint, gather all relevant information about your interactions with the agency, including dates, times, and the nature of the communications. This documentation will strengthen your case when reporting the agency's behaviour.
Seek Legal Counsel if Harassment Continues
If harassment persists despite your efforts, seeking legal advice can be helpful. A lawyer can help clarify your rights and guide you on how to proceed. They can also communicate directly with the collection agency on your behalf, often leading to a quicker resolution. Legal counsel can assist in exploring debt relief options and negotiating with creditors to find a solution that works for your financial situation.
Debt Relief Options
Informal Settlement
In addition to seeking legal counsel, exploring debt relief options may be helpful. One option is an informal settlement, where you negotiate with the collection agency to reach a mutually agreeable resolution. However, for this type of settlement, you usually need to make a lump sum payment, as creditors want to be paid immediately, not over a period such as a monthly payment plan.
Refinancing
If you own a house, you can borrow against it through a Home Equity Line of Credit (HELOC) to pay off your debts. This will help consolidate your debts and reduce the interest rates on your debt. Your home must have enough equity, which is from the house's market value minus the mortgages owed. Most banks require more than 20% equity before allowing you to borrow against your house.
Consumer Proposal
If you are still struggling with your debts, a consumer proposal may be the best option to reduce them and avoid bankruptcy and keep all of your assets. A consumer proposal involves working with a Licensed Insolvency Trustee to create a formal proposal to repay your debts. Once filed with a trustee, the interest and collection from the creditors immediately stops. The consumer proposal would set out terms for which you would pay to the creditors for up to five years and, in most cases, can reduce your debt owing up to 70%.
Conclusion
Dealing with collection calls in Canada doesn't have to be a constant source of stress. You can take control of your financial situation by understanding your rights, communicating effectively with collection agencies, and using legal methods to stop unwanted calls. These strategies impact your ability to manage debt-related stress and protect your consumer rights.
If you want help reducing your debt and stop collection calls, please contact Litvack Group for a free, no-obligation consultation.
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