If you’re struggling to repay your debts, receiving collection calls from creditors and debt collection agencies can feel overwhelming. Being contacted for debt collection can leave you unable to sleep and afraid to answer the phone.
Here, we explain how debt collector laws work in Alberta, and how you can stop collection calls from creditors to take some weight off your shoulders.
What is a debt collection agency?
If you have unpaid debts, your creditors may hire a debt collection agency to help recover what you owe. If you struggle to meet your repayments, a debt collector may contact you to collect the money that you owe on a credit card, line of credit or loan.
Your creditor (the company that you owe money to and are borrowing the money from) may try to recover the money you owe by:
- Using its own debt collection department (if it has one)
- Hiring a debt collection agency to get the money back on its behalf
- Selling your debt to a debt collection agency
Alberta requires all debt collection agencies, collectors, debt repayment agencies and agents to be licensed under the Consumer Protection Act and the Collection and Debt Repayment Practices Regulation.
The process of debt collection in Alberta
The process that a debt collection agency will follow throughout Canada also applies to Alberta. The debt collection agency will first contact you via letter, generally to request that you begin to pay off your debt, and notifying you that your account is now in collection.
After this, the agency will try to contact you over the phone, usually a week after the first letter has been sent. Once they reach you, they are legally required to inform you of who they are, how much you owe, the date the debt was transferred to them, and they must prove that the debt exists.
Once they have carried out the above, it is up to you to find a way to repay your debts. If you continue to be unable to repay the money owed or refuse to do so, the debt collection agency is able to send notice that your creditors will take legal action against you. This means you will have a court hearing and if the judge rules against you, your wages could be garnished.
What are the debt collection laws in Alberta?
What debt collection agencies can do:
- They can contact your friends, relatives, spouse and neighbours to get your address or phone number
- Contact your employer (only once) to confirm your employment status
- Contact you at work, unless you specifically tell them not to and have alternative plans to discuss the debt with them
- Charge you a one-time administration fee
What debt collection agencies cannot do:
- Call before 7am or after 9pm Monday to Saturday
- Call before 1pm or after 5pm on Sundays
- Harrass you or your family, friends and neighbours, or use abusive language
- Threaten or start legal or court action to collect the debt without notifying you first and receiving the creditor’s approval
- Collect more money than what you owe the business or person who hired them
- Use threatening language or language that would be considered intimidating
- Discuss your debt with anyone except for you unless they have your permission
- Make three or more unsolicited contacts in any period of 7 consecutive days
- Give false information about anything
- Call you in a way that will cost you money, for example if the collect calls or calls to cellphones cost you
- Call you at work if you’ve specifically asked them not to
- Communicate with you without identifying themselves, the name of the collection agency, the name of the company they are collecting on behalf of and the amount owed
- Call you on a holiday
- Collect money from you at your place of employment
How long can a debt collection agency collect on a debt in Alberta?
There is a two year limit for creditors or collection agencies in Alberta who are looking to take legal action against you to collect on debts that you owe. Once two years have passed, you will still owe the debt, but many collection agencies will stop trying to collect the money as they won’t be able to take legal action against you.
However, this limitation can be extended for up to ten years if you have a court judgement against you before the original time limit expires.
How can I stop collection calls from creditors?
No one deserves aggressive, harassing phone calls from debt collection agencies. While you’re struggling to manage your debts, the situation can be made worse by debt collection agencies contacting you for payments. But there are steps you can take to avoid debt collection calls, to take the pressure off you.
If you’re harassed by creditors or debt collection agencies, it’s important that you know your rights and the steps you can take to stop the calls from happening.
Your options to stop debt collection calls, include:
- Getting your account current, and keep it that way
- Negotiating a settlement or new payment terms with your creditors. Often, some credit companies are willing to listen and negotiate a term that works for both of you, depending on the amount of debt that you owe.
- Choosing to file a Consumer Proposal or file for Bankruptcy.
- Making a complaint to the Financial Consumer Agency of Canada if you feel a debt collector isn’t respecting your rights.
If you choose to file a Consumer Proposal or declare Bankruptcy, your LIT will deal with your creditors on your behalf. You can discuss what debt relief option will best suit your situation with your LIT, and decide on next steps to begin your journey to becoming debt-free.
If you file for a Consumer Proposal or Bankruptcy, within five days of filing your Trustee will notify your creditors and all debt collection calls should cease.
Ready to clear your debts?
We understand that debt collection calls can leave you feeling distressed. At Allan Marshall & Associates, our supportive and professional Licensed Insolvency Trustees care about helping people like you become debt-free.