1. I am from the Legal Department and they are suing you.

In my experience, less than 2% of all debts listed with a collection agency ever result in formal legal proceedings, and in most cases, the legal costs necessary to initiate a lawsuit must be advanced by the collection agency. . From a business perspective, it doesn’t make sense to throw good money after bad in hopes of recouping legal costs and debt if you don’t have enough assets on hand to meet the judgment sought. It just isn’t worth it to the collection agency. Bill collectors use the “law department” threat only because it’s scary and most people don’t know better. The fact is that most collectors sit in a tiny 3″x3″ cubicle and pretend to be someone they are not on the phone.

2. I am going to garnish your paycheck.

To get any part of your paycheck, the collector needs a court judgment in your favor, but collectors will not seek a judgment unless they have reason to believe you have enough assets to satisfy a judgment. Pursuant to Section 7(2) of the Wages Act (Ontario), no more than 20% of your wages may be garnished. A creditor may file a motion to increase the amount of wages that can be garnished, but a debtor also has the right to file a motion to reduce the amount. I have heard collectors tell people that they will garnish 50% of their wages, but the truth is that even if they get a judgment, garnishments rarely exceed 15-20% of wages. Again, they only use threat because it scares people and most don’t know any better.

3. If I don’t have the payment by 4 pm today, we are (Insert threat here).

Bill collectors are paid a commission for doing their jobs, as are managers who put pressure on their necks to achieve their goals. Some aggressive collectors can make six figures a year if they push people hard enough. They will tell you anything they feel will result in a larger commission check and payout for them.

4. Pay in full, monthly payments are not an option.

They want full payment from you because they make more money when you pay in full. Payments are always an option; In most cases, going directly to the creditor will allow you to get a monthly payment plan. It won’t fix your credit, but at least you can stop the demand for full payment.

5. Collectors can call you as much as they want.

Pursuant to Section 22(6) of RRO 1990, Regulation 74 of the Collection Agencies Act (Ontario), there are restrictions on the frequency of calls collection agencies may make to you. Regardless of what you are told, a debt collector cannot harass you. If you file a letter requesting the collection agency to contact you in writing only, the calls must stop; if not, you can escalate your behavior to your ombudsman or provincial ministry for further action.

6. Collectors may call and harass your family, friends, and neighbors.

A collection agency may only contact a third party to confirm your address and phone number or your employer to confirm your employment, title, and business address; that’s all (Section 22(3) of Regulation 74 of the Collection Agencies Act). If the collector divulges details about the debt or tries to embarrass you, there are steps the collector can take to try and stop this behavior.

7. Bill collectors can talk to you any way they feel like.

Bill collectors can be unpleasant and rude; many think that insulting people will get the debt paid. Collection laws prevent this type of behavior from happening again if you escalate it and fix the problem. If you feel you have been mistreated by using obscene, intimidating, or coercive language, you can certainly stop it. They will almost certainly deny the activity, so a tape-recorded conversation or voicemail will be your best friend here.

Collection agencies and collectors have a bad reputation because they are a business like any other whose objective is to generate profits for their shareholders; it’s your job to pressure him into paying. There are ways to deal with debt and debt behavior, but it takes time and some investment to research your rights. Try not to avoid debt but to find a way to deal with it. The only way to stop collection activity is to pay the bill or file for bankruptcy. If you can pay the bills in full, do so as soon as possible.

If paying your bills is not an option due to extreme financial hardship, you may want to explore bankruptcy by consulting with a Trustee in your local yellow pages. Bankruptcy will surely fix the debt, but since it is detrimental to your credit rating, it should only be used as a last resort. In addition, a Trustee is a court-appointed agent for your creditors, so even if you pay them for their services, the Trustee is looking out for your creditors’ best interests. Your debts are eliminated, but most of your assets are also subject to certain limited exceptions, and your credit report shows the effect for 7 to 10 years.

Debt settlement should be considered as an alternative to bankruptcy, as it is fast becoming one of the newest and best options in Canada to discharge debt quickly and ethically. A debt settlement company will act as your agent and negotiate a settlement with your creditors. Once the settlement is paid, the balance is paid off and your credit report is updated to reflect that the debt is finalized. The time frame to settle the debt can be from 1 month to 36 months, depending on your capacity. This is often the least expensive, least damaging to your credit, and the fastest path to debt relief.

Remember that collectors make a living trying to scare and intimidate people so they can win a big commission check. Consider the source when they call and don’t let collectors pressure you, you have rights and you can fight back and win!