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Debt Collection Laws in British Columbia – Do I Have To Pay Collectors?

debt collection laws BC

If you’ve missed a bill payment and it’s gone to collections, you know how stressful it is to deal with collector phone calls. If you’re wondering how to make the calls from creditors stop, it’s time to speak to a Licensed Insolvency Trustee (LIT). 

An LIT is a debt professional who can provide debt advice and services and help you create a plan to stop calls from creditors. They can also inform you of your rights when dealing with a collection agency. This article highlights the debt collection laws in B.C. and what you can do if you can’t afford to pay your debt. 

Why Was My Debt Sent to Collections?

If you forget to make a payment, or you can’t afford to pay your debts, your creditor may send your debt to collections. A debt collection agency is a company that collects unpaid debts or tries to help creditors track down debtors. Some creditors have an in-house collection department, while other creditors may hire a debt collection company or sell your debt to a collection agency. 

What to do When Your Debt is Sent to Collections

When your debt is sent to collections, you will typically receive a written notice before the collection agency contacts you. At this point, you can try to reach out to your creditor directly to see if you can negotiate a deal. Ask if you can pay a portion of the balance or the full amount to avoid your debt going to collections. 

If you are unable to make a deal with your creditor and you start to receive collection calls, make sure you ask the person calling for details, including: 

  • The caller’s name and phone number 
  • Name of the debt collection company 
  • How much you owe
  • Who the money is owed to
  • The original payment date 

After speaking to the collector, find time to go through your bills to confirm that the debt is actually yours. If the debt does not belong to you or the amount of money owed is incorrect, call the creditor and ask them to correct the error. Finally, check your credit report to see if the collections debt is listed. 

If the debt is yours, and you want the collection calls to stop, one option is to pay off the full amount. In this case, don’t forget to ask for a receipt. If you can’t afford to pay the full amount, you can try to negotiate with the creditor to see if you can set up a monthly payment plan or some other alternative. You can also request that the collection calls stop and the agency only contact you in writing. 

What a Debt Collector Can and Can’t Do

When you’re dealing with debt collectors, it’s important to know your rights. There are limits to what debt collectors can do. For instance, a debt collector can only contact your boss, friend, neighbour, or relative to get your phone number or address. A debt collector can only call from Monday to Saturday between 7:00 a.m. and 9:00 p.m. and Sundays between 1:00 p.m. and 5:00 p.m. They also can not call you on holidays. 

Debt collectors also can not:

  • Contact a friend or neighbour to ask them to pay your debts
  • Use threatening or abusive language
  • Provide false or misleading information
  • Put excessive pressure on you  
  • Discuss the details of your debt with another person, without your permission
  • Charge you legal fees
  • Charge you fees for non-sufficient funds on payments you submitted 

What Are The Debt Collection Laws in BC?

If you’re questioning, “How long can a collection agency collect on a debt,” the answer in British Columbia is two years. This is defined in B.C.’s Limitation Act. The act outlines the statute of limitations, which is the amount of time someone has to take legal action against you in the civil justice system. The two-year period starts when you first incurred the debt or from the last time your debt was acknowledged.

Debt is considered acknowledged if you make a payment on the debt, put another charge on the debt account, or admit that the debt is yours in writing (including emails). If you do acknowledge the debt, the limitation period starts over. 

While your creditors can no longer take you to court for the debt after two years have passed, they can continue to pursue you. Additionally, the unpaid debt can show up on your credit report and impact your credit score for up to seven years. This can make it more difficult for you to secure credit in the future. 

What to do if You Can’t Pay Your Collection Debt

If you can’t afford to pay your debt, you should contact an LIT to discuss your options, which might include: 

Wait out your debt

While waiting out your debt is possible, it can be an extremely stressful experience. Once the statute of limitations has passed, the collection agency can no longer take you to court over the debt, but can continue contacting you. You will have to consider if this is something you can handle. 

If you have debt in collections that has already passed the two-year mark and are considering making a payment, speak with an LIT before you do anything. Remember, a payment (no matter how small) is an acknowledgment of your debt and will reset the limitation period. This will extend the time the collection account will show up on your credit report. 

Consumer Proposal

A Consumer Proposal is a legal process administered by an LIT that can help to reduce the amount of debt you owe. In a proposal, you and your LIT come up with an offer to pay a portion of your overall debt and present it to your creditors. If your creditors agree to the proposal, you have up to five years to make your payments. A Consumer Proposal will stay on your credit report for three years after you pay off all of your debt or six years after you sign the proposal, whichever is sooner. 

Contact an LIT For Advice on Debt Collection Laws BC

If you have debt in B.C. that has gone to collection, reach out to a Licensed Insolvency Trustee for help. At Allan Marshall & Associates, our LITs will work with you to assess your financial situation and create a plan to get you out of debt. We understand how stressful it can be to deal with debt collector phone calls. You don’t have to deal with debt alone. We can help.

Give us a call at 1-888-371-8900 or fill out our online contact form for a free, no-obligation consultation.