This article was written by Linda Rainaldi of the People?s Law School with funding assistance from the Law Foundation of BC.
?There are millions of consumer credit transactions like bank loans, credit card purchases, and retail sales every year in B.C.,? says lawyer Allan Parker, ?but the average consumer is conscientious about debt repayment and most credit is paid off.?
It is estimated that less than 5% of credit obligations go into arrears and most are eventually brought up to date. ?People don?t pay their debts because they can?t pay, not because they are morally weak,? emphasizes Parker.
If you have fallen behind in paying your debts, chances are the creditor will try to collect the debt from you. Say, for example, you bought electronic equipment at a local store and haven?t been making payments. The storeowner may try to collect the debt himself by contacting you by letter or telephone, or by starting a court action. He may even give the account to a collection agency whose business it is to collect debts for others, for a fee. Many major creditors, including banks, use collection agencies for debts such as credit card accounts.
Collection agencies must be licensed under the B.C. Business Practices and Consumer Protection Act and they must follow certain guidelines in collecting the debt.
Parker explains the rules about debt collection. In general, they can?t put extreme and unreasonable pressure on you, your family, or your employer. ?In other words,? says Parker, ?they can?t harass you.?
What would be unreasonable conduct by the collection agency? ?First, they can?t intimidate you,? says Parker. So, for example, they can?t phone you, your family, or your employer many times a day and demand that you pay your debt. Nor can they threaten actions that may not be appropriate, like garnishment of your wages before a judgment is obtained against you. Repeated and aggressive phone calls at home from collectors are a very common complaint from debtors.
Second, the collection agency can only contact your employer to confirm that you work there, not to talk about your debt.
Third, they can?t mislead you by sending documents that look like they came from the court or a government office.
Fourth, a debt collector can?t ask someone else, like someone in your family, to pay your debt.
If you feel a debt collector is harassing you, you can complain to the Business Practices & Consumer Protection Authority and they will look into the matter. You can also write a letter to the debt collector and demand that they stop phoning you, and that any future contact from them be only in writing. If you don?t agree that you owe the money, you can demand that the creditor stop contacting you altogether.
But Parker always advises people to first talk to the creditor about the debt and see if you can agree on how to repay it. Credit counselling is also a good idea when debt gets out of hand. (See the Credit Counselling Society of B.C.?s website at www.nomoredebts.org).
Allan Parker is a lawyer and the LawLINE Program Manager at Legal Services Society of BC.
The purpose of this article is educational in nature. It is not intended as legal advice. It offers general information only. If you have a legal problem, you should seek professional advice.