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BC Debt Collection Laws – Do You Know Your Rights?

BC debt collection laws

Are you burdened by overwhelming debt? Are you tired of dodging phone calls from persistent debt collectors? If you want to make the calls stop, reach out to a Licensed Insolvency Trustee (LIT). 

An LIT in British Columbia can help you navigate the B.C. debt collection laws that dictate what collectors are legally allowed to do. An LIT can also assist you in creating a plan to deal with your debt so you can put an end to the collection calls from creditors for good. 

What is Debt Collection?

Debt collection is the process of pursuing and collecting outstanding debts. If you fail to repay your debt as agreed, your creditors or a debt collection agency can come after you to recover the money you owe.

The purpose of B.C. debt collection laws is to ensure you are treated fairly by collectors, and your rights are protected. Debt collection laws in British Columbia establish what creditors and credit collectors can and can’t do, and what practices are considered harassing or abusive. By understanding the debt collection laws in your province, you can better protect yourself and your rights. 

What is a Debt Collection Agency?

A debt collection agency is a business that creditors can hire to collect outstanding debts on their behalf. Your debt will go to a collection agency if you forget to make your payments or you can’t afford to make your payments. Debt collection agencies must adhere to the BC debt collection laws that are put in place to protect you from unfair or harassing collection practices. 

What Happens When Your Debt is Sent to a Collection Agency?

Typically before a collection agency contacts you, they will send a written notice with the following information:

  • Name of the collection agency 
  • Name of the person or business you owe money to 
  • The amount you owe

If you receive this notice, you should contact your creditor immediately to see if you can make arrangements to repay your creditor. You want to avoid your debt going to a collection agency because this can negatively affect your credit score. A low credit score can make it more difficult to access credit in the future. 

If you get a call from a debt collector, ask them to provide the following information:

  • Collection agents name
  • Debt collection company
  • Name of the creditor or company they are collecting money for
  • Debt collectors’ phone number

You should also ask for details about the debt, including how much you owe, who you owe, and when you started owing it. Use this information to verify that the debt is yours. 

Debt Laws in British Columbia

There are laws in place that outline how debt collectors can collect debt. For instance, a debt collector can only contact you Monday through Saturday between 7:00 a.m. and 9:00 p.m., and Sundays from 1:00 p.m. and 5:00 p.m. 

There are also rules and laws guiding when a collector can contact your friends, neighbors, or employer. The collector can only contact another person about your debt if that person has cosigned your loan or if you have given your consent to say they can be contacted. Additionally, a collector can contact your family member, friend, or acquaintance to confirm your contact information.

Other rules outlined by the Consumer Protection B.C. state a debt collector can not: 

  • Call you, a family member, or a friend on a statutory holiday 
  • Use intimidating or threatening language
  • Put excessive pressure on you to pay your debt
  • Threaten to sue you unless they are actually taking legal action
  • Contact you in a way that will cost you money
  • Give false or misleading information 
  • Call your cell; unless this is how you asked to be contacted 
  • Include additional collection-related costs to the amount you owe other than legal fees and fees for insufficient funds on payments. 

What to do if a Collector Violates Your Rights?  

If you believe that a debt collector has violated your rights, you can file a complaint. Where you make your complaint depends on the type of debt collector you are dealing with. For the debt collection department of a federally regulated institution or a debt collection agency hired by a federally regulated institution, you can register a complaint with the Financial Consumer Agency of Canada

How to Stop Collection Calls 

If collection phone calls are causing you stress, and you want them to stop, you can ask that the collector only contact you in writing or only contact your legal representative. To do this, you must send a written request by registered mail or, you can use the B.C. Consumer Protection online form.  Also, when you are filing for a debt relief program with a Licensed Insolvency Trustee to handle debt that you owe, a stay of proceedings will be put in place, which is the legal prevention of creditors or collection agencies from contacting you. 

What to do if You Can’t Pay Your Debt

In B.C., debt collectors can legally take action against you for up to two years, according to B.C.’s Limitation Act. After two years, your creditors can no longer take legal measures but can continue to pursue you. Any unpaid debts can also impact your credit score as they will stay on your credit report for up to seven years. 

If you can’t afford to pay your debt, you should contact an LIT to discuss your options. An LIT can explain the full range of debt relief options available. Two possible options for dealing with collection debt, include: 

Wait out your debt

One option is to try and wait out your debt for two years. While this is possible, it can be an incredibly stressful experience. After two years, your creditors can no longer take legal action against you, but the collectors can continue to pursue you. 

Consumer Proposal

Another option is to speak with your LIT about a Consumer Proposal. A Proposal is a legal process administered by an LIT that can help to reduce the amount of debt you owe. In a Consumer Proposal, you and your LIT develop an offer to your creditors to pay a percentage of your debt, extend the time you have to pay, or both. When you file a Proposal, you also gain protection against your creditors. All collection calls and credit lawsuits against you will stop. 

Speak to an LIT About B.C. Debt Collection Laws

If you have debt in collections, it’s important you understand the B.C. debt collection laws. A LIT at Allan Marshall & Associates can answer any questions you have about the debt collection process and provide advice on how to manage your debt moving forward. Reach out to one of our debt experts today for a free, no-obligation consultation at 1-888-371-8900 or fill in our online contact form.