10 Tips If You Are Contacted by a Debt Collector in Canada

A call or letter from a debt collector can catch you off guard. Whether the debt is yours or you believe it is a mistake, knowing how to respond can make a significant difference. Here are ten tips for handling the situation.

1. Do Not Ignore the Collector

While you are not legally required to respond, ignoring a debt collector will not make the debt disappear. In some cases — particularly with secured debts — the consequences of ignoring the situation can include property seizure or legal action.

2. Keep Detailed Records

Document every interaction with the collector — phone calls, emails, voicemails, and letters. Note the date, time, the name of the person you spoke with, and what was discussed. This documentation is critical if you need to file a complaint later.

3. Verify Their Identity

Ask the collector for their full name, the name and address of the agency they represent, and their credentials. If they represent a collection agency, confirm that the agency is licenced in your province.

4. Request the Debt Details in Writing

Ask the collector to provide a written breakdown of the debt, including the original creditor, the amount owed, and how the total was calculated. You have the right to this information.

5. Send a Written Notice to Stop Calls

You can send the collection agency a written notice stating that you no longer wish to receive calls from them. This may provide peace of mind, but it does not eliminate the debt or prevent potential legal action.

6. Do Not Agree to a Payment Plan You Cannot Afford

Take your time to assess your finances before committing to any payment arrangement. A plan you cannot maintain will only make things worse. If you reach an agreement, get written confirmation of the amount and a statement that the debt will be considered settled once the agreed amount is paid.

7. Consider the Size of the Debt

The likelihood of being sued over a relatively small debt is generally lower than for a large amount. Understanding this can help you assess the urgency of the situation.

8. Know the Limitation Period

In many provinces, if a debt is more than two years old, the collector may no longer be able to take legal action against you. In Ontario, for example, the limitation period for most debts is two years. Be careful not to restart the clock by making a partial payment or acknowledging the debt in writing.

9. Seek Legal Advice

Every situation is different, and the rules vary by province. A lawyer can review the fine print, advise you on the best course of action, explain your options, and clarify your rights.

10. File a Complaint If You Are Harassed

If a collector calls outside permitted hours, ignores your written notice, uses threats, or otherwise violates the rules, you can file a complaint with your provincial consumer protection office. For example, Consumer Protection BC can assess your case and, if warranted, order the collector to stop contacting you or even revoke their licence.

How a Personal Legal Service Plan Can Help

A Personal Legal Service Plan gives you access to a lawyer who can review collection notices, explain your rights, communicate with collectors on your behalf, and help you resolve debt disputes with confidence.