There are few feelings as satisfying as getting a new home or a new car. However, without the existence of loans, making these large and often expensive purchases would be very difficult. As a result, loans play a very large and important role in the lives of many people.
However, loans can cause some problems if you don’t handle them responsibly.
When you secure loans, it is important that you only borrow an amount that you know you can pay back.
If you stop paying back your loan and don’t stick to the agreed-upon payment schedule, you may have to deal with a debt collector.
What Is A Debt Collection Agency?
A debt collection agency is often hired by a creditor or lender to get borrowers to start paying off their loans once they’ve defaulted on their payments for too long.
A collection agency will sometimes be much more aggressive and persistent than a standard lender would be. They will frequently call and send letters to you to try and get you to repay your debts. Suffice to say, they are much less enjoyable to deal with than a normal lender.
How Does A Debt Collection Agency Work?
The process a debt collection agency will follow is fairly simple and is essentially universal among all the provinces in Canada. The debt collection agency will make their first contact via a letter. This letter will be a general request that will ask you to begin paying off your debt and will say your account is now in collection.
Next, the agency will try to reach you over the phone, usually a week or so after the first letter they’ve sent. Once they are able to reach you, they’re legally required to tell you who they are, how much you owe, the date the debt was transferred, and prove that the debt actually exists.
Once that’s done, it’s up to you to find a way to repay your debts. If you continue to not pay your debts and refuse to do so, the debt collection agency can send you a notice that they intend to take legal action. If they do, you will have a court hearing and if the judge rules against you, your wages could potentially be garnished.
However, the debt collection laws vary from province to province. Below, we will take a look at some of the debt collection laws in Alberta, to make sure you know what to expect.
What are the Debt Collection Laws in Alberta?
To make things easier to understand, we will create two sections here. One will look at things debt collection agencies can do in Alberta and the other will look at things they cannot do.
Things Debt Collection Agencies Can Do in Alberta
- Contact you between 7 am and 10 pm Mountain Time.
- Contact your friends, relatives, spouse, and neighbours in order to get your address or phone number.
- Contact your employer a single time to confirm your employment status.
- Contact you at work, unless you specifically tell them not to and have plans in place to discuss the debt.
- Charge you a one-time administration fee.
Things Debt Collection Agencies Cannot Do in Alberta
- Harass you or your friends/families/neighbours.
- Use threatening language or language that would be considered intimidating.
- Discuss the existence of your debt with anyone except for you.
- Make three or more unsolicited contacts in any period of 7 consecutive days.
- Give false information about anything.
To see a list of all of the rules and laws that debt collectors must follow in Alberta, be sure to check out The Fair Trading Act and the Collection and Debt Repayment Practices Regulation.
How Should You Handle a Debt Collector in Alberta?
Now that you know the laws surrounding the tactics a debt collector can and cannot use to retrieve a debt, let’s look at the best things you can do to ensure your dealings with them go as smoothly as possible. The most important thing you can do is pay off your debts. It’s the easiest way to get a debt collector off your back. You can’t avoid them forever and if you try, there is a good chance you might get sued.
However, the method in which you decide to pay off your debts can differ depending on your life and financial situations. Strictly speaking, there are three main methods that you can use to pay off your debts. You can pay off the entire amount at once, can come up with a payment plan with the agency, or you can potentially agree upon a settlement amount which will involve you paying back less than your original amount.
Trying to negotiate a settlement on your own? Read this first.
What Should You Do If You Think a Debt Collector is Breaking the Law?
If you feel that your debt collector is harassing you or is breaking the law, you are not alone and there are things that you can do. First, you should explain to the debt collector themselves that you believe they are being unlawful. If they do not cease their illegal behaviour, you can reach out to the Consumer Services branch of the Government of Alberta and file a complaint.
In conclusion, it is important that you educate yourself on the debt collection laws in Alberta to always ensure that you are not being taken advantage of. Also, familiarizing yourself with the process of debt collection can make dealing with these agencies much easier than if you went into it completely blind.