How to Deal With Debt Collection Agencies in Ontario

How to Deal With Debt Collection Agencies in Ontario

Posted on February 8, 2021

Anyone can get themselves into debt. That fact has been brought home in perfect clarity over the past decade or so. Often through no fault of their own, Canadians are finding themselves in difficult situations and have no idea how to handle it.

One common situation that people find difficult to deal with is handling debt collectors. Our Burford car loan team have some experience with them and have a few pointers to share.

If you find yourself having to deal with debt collectors, these quick tips could help.

Don’t avoid them

Debt collectors are a tenacious bunch. It’s in their job description. There is absolutely no point avoiding them, ignoring calls, ignoring visits or letters.

It is much better to take the initiative and actively tackle the situation head on. You’re not going to escape them and they are much more willing to work with you if you work with them.

Check the debt

While unusual, double and then triple check the debt in question is actually yours. People and systems can make mistakes, so don’t be afraid to ask for a validation letter from the debt collector outlining the debt, the amount and any details they have on the account.

It is your legal right to receive a debt validation letter and a debt collection agency must supply one within five days of first contact if requested.

Assess your affordability

If the debt is yours, work out how much of it you can afford to pay over what term. The debt collector will likely provide a payment plan or bill but you don’t have to use that. You don’t even have to pay what they are asking.

Chances are, you’re seeing debt collectors because you’re struggling with debt. Don’t let their demands put you further into the red. Be honest with yourself and come up with a figure you could pay as a lump sum and pay monthly.

Negotiate with the collection agency

Some debt collection agencies are better than others. Some will levy exorbitant fees because they are predatory. Most won’t and would rather keep things sensible to stand a higher chance of the debt being paid off.

Once you have verified the debt and have assessed what you can afford, now is the time to negotiate.

Offer half of what they are asking and explain why it’s all you can afford. Show them the evidence if you’re willing or just wait for their response. Some will accept that offer and set up the payment schedule. Others will counter offer.

Treat it like buying a house or a car. Haggle sensibly, be honest and try to get the lowest price you can while being fair. Many debt collectors would rather get a 60% return rather than nothing.

Prioritize paying off that debt

Unless you have a lot of more expensive debt, prioritize paying off the debt collector as quickly as possible. The quicker you pay them off, the quicker they are off your back.

Know your rights

Finally, know your rights when it comes to debt collection. Ontario has regulations in place to protect you from unfair practices and harassment. Know your rights and make sure no debt collector violates them.

When you’re ready for a car loan, get in touch with the Burford car loan experts at Northway Ford for great deals on auto finance.

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