Howard Hayes Bankruptcy Cambridge Ontario Blog

Many of the people we talk to have had at least one of their debts put into collections.  It is not a pleasant experience.

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If a lender’s efforts to recover a debt are not successful, they often hire a third party collection agency to try to recover their money.

A piece of advice we always give our clients is not to ignore the collection calls.  It will likely only make things worse.  Even if you have little or no money and know that you’re not going to be able to meet the demands of the collection agents, ignoring them will only leave them guessing as to why you’re not making payments and they’ll continue to call.   

Here are three options to stop collectors from calling:

1. Negotiate with them and work out a plan. Some collection agents are better than others.  Not all of them, but some collection agents are slowly realizing that it may benefit everyone to work out a reasonable plan with you rather than coercing you into unrealistic repayment plans.
2. You can file a Consumer Proposal with a licensed trustee, or
3. File for Personal Bankruptcy which, like a Consumer Proposal will legally protect you and force them to stop all collection actions against you. 

Collectors are often on  commission  (they get paid more if they can collect more money from you) so one incentive they have to call as often as they do and make demands is that by collecting money from you they are increasing the size of their own pay cheque.

In Ontario, collectors are obligate to stick to very specific rules when it comes to collecting debts, however based on what many of our clients tell us.  It’s also apparent that not every collection agent sticks to these rules.

• You’re entitled to be notified in writing first, that your account has been assigned to them for collection.
• If calling you, the collector must clearly identify themselves, who they work for, and amount owing.
• They cannot make calls that may be considered harassing to you and your family.
• They cannot give you false or misleading information
• When collecting a debt, they can only call other people to confirm phone number and address.
• They must have written permission from the original creditor to take any legal action to collect a debt from you.

A full list of regulations can be found on the Ontario Government website.

The most important factors to remember if collection agents are calling you are that you have rights and most importantly, you have options.

At Hoyes Michalos & Associates Inc, we’re happy to provide you with the advice you need to deal with collection agents that call and to help you with ways to bring your debts under control.  We can discuss your options either on the phone or we can arrange to meet with you in our office for a no charge consultation.   Contact us by sending an email with any questions you may have or call me at 310-PLAN or our local number (519) 622 3773.

It is no secret that collection calls are annoying, frustrating and even scary.  Getting phone calls all the time from people asking for money that you cannot pay can definitely make you never want to pick up the phone again! 

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A lot of people think that if they simply ignore all the calls for a while, they will eventually stop.  Unfortunately, the complete opposite can happen.  In fact with modern day technology, most collection agents now use computerized auto dialers that keep calling at set times of the day until someone in the house picks up.

I would never advise someone to ignore calls from creditors.  Not only will they not stop, but the creditors will just try harder.  They might call more often, or find different numbers to call you on such as friends/family/employer.  They’ll also send threatening notices in the mail.  Eventually, they will go to court and attempt to get a wage garnishment against you.  For a consumer debt, that means your employer must give up to 20% of your gross pay to the creditor.   Obviously, a wage garnishment is much worse than some pesky phone calls and you want to avoid this happening.

Ignoring collection calls will only make your problem worse.  The only way you can get them to stop is by one of these three options.

1. Finding some way to pay at least some of the money you owe.  You might try to make a deal with them to pay your debts in a way you can afford.
2. You can file a Consumer Proposal with a licensed trustee, or
3. File for Personal Bankruptcy which, like a Consumer Proposal will legally force them to stop all actions against you. 

If you would like to discuss any of these options for getting your creditors to stop calling, I would be happy to speak with you.  Call 519-622-3773 or send me an e-mail and we can make it possible for you to pick up the phone without fear!

How????

Normally, collection agents are hired to collect on a debt when the person you owe to realizes that you’ve not been making the monthly payments on debts.

The collection agent usually has one thing in mind – keep calling, calling, calling until the account is collected.  It can get so bad for the person who owes the money as every time the phone rings they never know if it will be someone asking for money that they simply do not have.  If this sounds like you, you may be wondering how you can stop these annoying calls?

Here’s some idea’s:

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Firstly, you can try to make a deal with the creditor that you will pay-off what you owe them in a way you can afford.  This is for people who think they can pay back the entire debt but just can’t make the monthly payments that are being asked.  If they are able to make smaller monthly payments over a longer period of time, they could eventually pay back everything they owe.  Sometimes, creditors will agree to this. 

You could also try to make a lump sum deal with the collection agent themselves.  Collection agents are paid by commission based on how much money they get so, if you offer them a lump sum of what you can afford, even if it is not the full amount they might go for it since it means they will get commission right away rather than having to wait many months for it.

File a Consumer Proposal. By offering a Consumer Proposal that is filed through the office of a licenced trustee, you’ll be legally protected from collection agents calling you trying to collect on the accounts.  As soon as the collection agent is made aware of the filing of the proposal (usually within 2 to 5 days of filing) they have to cease their efforts in trying to collect.

File personal bankruptcy.  This will guarantee that these collection calls are stopped.  When you file for personal bankruptcy, all of your unsecured debts are cleared.  As with the consumer proposal above, upon filing a bankruptcy, a ‘stay of proceedings’ is sent to the creditors telling them to stop all the actions they have taken against you, including collection calls.  A stay of proceedings is federal law under the authority of the Bankruptcy & Insolvency Act, so you will have peace of mind when your phone rings knowing that it is a friendly call and not someone demanding cash.

If you would like to learn more about how to stop collection calls, send me an e-mail or call me at 519-622-3773 and I would be happy to answer any of your questions and review all of your options with you. 

Other useful ideas along with an explanation of your rights are explained in more detail in books such as “The Wolf At The Door”, written by expert and previous collection lawyer Mark Silverthorn.  Click here for more information on how to obtain your copy.