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Credit/Debt

What happens to you if you overspend and can't keep up with your debts? If you don't pay your bills, you will likely be contacted by a collection agency. And, that may be something you might want to avoid for a number of reasons. In fact, Ontario's Ministry of Business and Consumer Services, says that it receives the most consumer complaints about collection agencies.

A collection agency is hired to collect money for a third party, usually a company. To avoid being contacted by a collection agency, communication is the key. If you are having a difficult time paying a bill, contact the company you owe the money to and explain your situation. Chances are they will work with you to find a reasonable way for you to pay the debt. However, if they don't hear from you and you don't pay, you may end up in collections.

Despite the number of complaints, there are rules that collection agencies when trying to collect debts. The rules vary by province but here are some examples:

Collection agencies cannot:

• Call you or members of your household, relatives, friends, neighbours or your employer so often that the number of calls received could be considered harassment
• Give any false or misleading information including references to the police or a law firm, credit history, court proceedings, lien or garnishment or imply that the collector or agency is part of a law firm or legal department of the collection agency or client
• Threaten legal action if the agency does not have the legal authority and consent of the creditor to do so
• Discuss your debt with anyone except you (unless you have given your express consent to do so), a guarantor of the debt, the creditor or someone you have identified in writing as your representative
• Contact you on a Sunday except between the hours of 1 p.m. and 5 p.m. or on a holiday
• Use threatening, profane, intimidating or coercive langue, or use undue excessive or unreasonable pressure

But collection agencies can:

• Contact your employer to get your employment information
• Contact your spouse, a member of your family or household, or a relative, neighbour or acquaintance to obtain your address and telephone number

If you find yourself in debt problems, call your local not-for-profit Credit Counselling agency or contact Credit Canada at www.creditcanada.com. Their counselors can provide you with advice on how you can best handle paying off your debts.

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