Facing debt collection can be stressful, especially when collection agents start contacting you.
This article, written by the Poupart Syndic team, explains what collection is, how to react to a collection agency, and what solutions exist to manage your debts legally and effectively in Canada.
What is collection and how does it work?
Collection is the process by which a creditor attempts to recover money owed. When a debtor cannot pay, the creditor may hire a collection agency to attempt to recover the debt.
Role of collection agencies
A collection agency acts on behalf of a creditor to claim payment. They can use several means to contact a debtor:
- Phone calls
- Emails
- Official letters
- Home visits (in some cases)
These agencies must follow strict rules set by Canadian law to prevent abuse and harassment.
Your rights when dealing with an agent
Here are some protections offered by law: A collection agent cannot contact you at inappropriate hours or insist excessively if you have already responded to their requests. They cannot use threats, intimidating language, or abusive behavior aimed at frightening you.
Moreover, the agent must clearly inform you of the amount claimed and the concerned creditor. You have the right to request that all communication be in writing to keep track of interactions and avoid any abuse.
Beware of fraudulent collection agencies
Unfortunately, some fraudulent agencies exist and use illegal practices to extort money from consumers.
Signs of a fraudulent agency
A fraudulent collection agency may show these signs:
- Demands immediate payment without proof of debt
- Threatens imprisonment or immediate seizure of property
- Refuses to provide official documents
- Requests payment through unusual means (gift cards, cryptocurrencies, direct transfers)
How to protect yourself from fraud?
If you suspect fraud, start by requesting written proof of the debt. Contact your creditor directly to verify the authenticity of the claim and avoid making payments to a fraudulent collection agency.
Never share personal or banking information over the phone. If an agency adopts questionable practices, report it immediately to consumer protection authorities so an investigation can be conducted.
Solutions to avoid collection and manage debts
If you’re in financial difficulty, several solutions exist to avoid collection actions.
Turn to Poupart Syndic for an adapted solution
As a licensed insolvency trustee, Poupart Syndic can help you find a solution to settle your debts, such as:
- The consumer proposal: An official agreement with creditors to reduce debt amounts.
- Personal bankruptcy: An option to eliminate unsustainable debts and start fresh.
Conclusion: Act before it’s too late
Collection can become a stressful situation, but solutions exist to deal with it.
If you’re in difficulty, contact Poupart Syndic today for a consultation and find the best strategy to regain financial stability.
