Debt Relief in Canada: Know Your Options and Rights for Fair Treatment

When you're in debt, chances are you may find yourself face-to-face with collection agencies. It's easy to feel overwhelmed and stressed as you try to keep up with it all, but running away or hiding from collecting agencies isn’t the best option. The ideal choice would be to enter into a debt relief program, such as an informal proposal to your creditors.

Pay off debts

An informal proposal is an out-of-court settlement wherein your creditor agrees to let you pay an amount lower than the total you owe. If you go into a debt relief arrangement with reputable debt counsellors in Canada, such companies can help negotiate the amount. Among the benefits of going into an informal proposal are:

  • If you have multiple debts, you may be able to pick which ones you will negotiate.
  • If you have a high position in an incorporated company, you may be able to retain that position.
  • Filing for Bankruptcy and Insolvency won’t be required.
  • You can immediately rebuild your credit right after settling the amount.

Not all debtors, however, are automatically eligible for informal proposal. Debt restructuring specialists, such as 4 Pillars Debt Consolidation & Credit Rebuilding for Victoria, BC, recommend that you discuss your situation to learn if this program is the best choice you can make to solve your debt issues.

On Dealing with Collecting Agencies

Meanwhile, if you continue to be bothered by collecting agencies, it's important to know your rights. Here are a few things you should know when dealing with collection agencies.

  • In Canada, every collection agency has to be registered with a government body. If you ask to see proof of this and your collection agency seems to be stepping around the issue, you could be dealing with a rogue agency.
  • Do a little investigation if you're contacted unexpectedly. Before a collection agency should contact you over the phone or in person, it has to send you a written notice by mail,not email. The notice should include the creditor’s name, how much you owe, some details of the agency, and written confirmation that the creditor has asked them to collect the outstanding debt.
  • If the agency in question is within their right to contact you, you should still make sure they're not abusing their right. Following your first direct conversation with the agency, according to Canadian law, they're not allowed to contact you more than three times within a seven-day period. In this context, "contact" can mean speaking to you face to face, calling you, sending you an email or leaving voice mail. Further to this, a collection agency must not contact you on a Sunday, unless it's between 1 and 5 PM, cannot contact you during a national holiday, use excessive pressure to harass you, or use threatening, intimidating or profane language during your contact.

When you're in debt, know your rights and your options, to make sure you settle things smoothly and you’re not unfairly treated.

Sources Collection agency: your rights, Debt Relief Canada: Your Rights when dealing with Collection Agencies,