When Times are Tough, Know Your Rights When It Comes to Creditors

The good news is -- there is no debtor's prison.

That said, there are collectors and creditors who try to put you in prison through incessant calls, threats, and other tactics.

Many of these are in violation of the debt collection laws, which are on the books both federally and provincially (the laws are similar in both Canada and the United States). 

You only need to turn on your television to see how stable (not) the economy has been since 2009. Recovery has been better some centers, but that doesn't mean all of a sudden everyone is on Easy Street.

In fact, the average personal debt in Canada is over $100,000. 

No wonder the collections industry is on the rise. Those companies seem to have enjoyed a healthy incline at the expense of others' misfortune.

It may be easy to judge those who have fallen into the credit abyss, but most people are just one paycheck away from the homeless shelter. An injury, industry downslide, job loss, health issue, natural disaster -- anything can turn even the most financially secure to Collectionville. 

If you are in collections and the calls are excessive and downright harassing, check online for "debt collection violations" in your jurisdiction. There's a good chance you can cite the violation to the person acting it out and stop the behavior right there. If not, there are reporting options. 

Here is an example of prohibited creditor practices: 

No collection agency or collector shall

• Collect or attempt to collect for a person for whom it acts any money in addition to the amount owing by the debtor;
• Communicate or attempt to communicate with a person for the purpose of collecting, negotiating or demanding payment of a debt by a means that enables the charges or costs of the communication to be payable by that person;
• Receive or make an agreement for the additional payment of any money by a debtor of a creditor for whom the collection agency acts, either on its own account or for the creditor and whether as a charge, cost, expense or otherwise, in consideration for any forbearance, favor, indulgence, intercession or other conduct by the collection agency;
• Deal with a debtor in a name other than that authorized by the registration; or
• Engage in any prohibited practice or employ any prohibited method in the collection of debts.
• No collection agency or collector shall engage in conduct described in any of the following paragraphs with respect to the debtor, the debtor’s spouse, a member of the debtor’s family or household, a relative, neighbor, friend or acquaintance of the debtor, the debtor’s employer, a person who guaranteed the debt or a person mistakenly believed to be the debtor:
• Publish or threaten to publish the debtor’s failure to pay.
• Otherwise communicate in such a manner or with such frequency as to constitute harassment.

Know your rights.