How to Talk to Collection Agencies

How To Talk to Collection Agencies

Receiving a phone call from a collection agency can be stressful. The agents are sometimes forceful, blunt, and difficult to negotiate with. It’s easy to become flustered or nervous when dealing with debt collectors.

However, it’s important to know how to talk to collection agencies properly. Asking the right questions can help you verify information, give you clarity, and make the debt resolution process easier in the future. Even though it can seem difficult, it’s necessary to get certain information when you receive a phone call from a collection agency.

Questions to Ask a Collection Agency

  1. Find out who is calling
  2. When you have an outstanding debt, the creditor themselves will usually contact you for the first 6 months. After that, they can send the outstanding debt to a collection agency. When you receive a call, always verify whether it’s the creditor or a debt collection agency contacting you. This way, you know who to contact and how to properly negotiate to pay your debts.

  3. Get details of the debt
  4. You should always ask for as many details about the debt as possible. Find out the alleged amount owing, who it is owed to, and when the debt was incurred. These details should be mailed to you before a collection agency calls you, but it’s a good verification step to ask for them again and make your own notes.
    If the debt doesn’t seem familiar, you can verify it directly with the creditor or obtain a free copy of your credit report from TransUnion or Equifax. If the debt isn’t yours, make sure to notify the creditor directly so the collection agency can contact the correct person.

  5. Get the agent’s details
  6. When dealing with a collection agency over multiple phone calls, it is best to always speak with the same agent. Always ask for the agent’s name, telephone number, and company name to ensure you only have contact with this person. The less agents involved, the easier it will be for you to keep track of any negotiations and payments.

  7. Ask for a written receipt for any payments
  8. If you are able to pay the collection agency or negotiate a payment plan with them, always ask for written confirmation and a written receipt. Verbal agreements are difficult to prove, so this written acknowledgement of any deal is necessary.
    When making a payment, never pay with cash (as this is nearly impossible to track) and always ensure you receive a receipt.

  9. Verify all the information
  10. If you’re concerned about the legitimacy of the collection agency, you can verify their information a few different ways. You can make sure they are legally registered in Ontario by asking for their Ontario registration number or directly contact the original creditor to ensure they work with this collection agency. If they aren’t legitimate or legally registered, you don’t have to deal with them.

Want to Stop Collection Calls?

If you’re receiving calls from debt collectors and want to stop collection calls, the best way to do this is to pay off your debt. A Licensed Insolvency Trustee can help with a variety of debt solutions to help get the collection agencies off your back and alleviate your debt.

If you want to stop the collection calls, Spergel can help. We know how to talk to collection agencies and can do so on your behalf. We will find the debt solution that is right for you.

Visit our Collection Agency Solutions for more information!

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Bankruptcy for Small Business Owners and Self-Employed Individuals

Bankruptcy for Small Business Owners and the Self-Employed

The decision to declare personal bankruptcy is a always a difficult one to make. For those who are self-employed or own a small business the decision becomes more complicated. How will your business assets be affected? What will happen to your business?

There is much to be considered as a business owner or self-employed individual in making the decision to declare personal bankruptcy. Spergel can help you explore your options and navigate the legal issues surrounding the decision.

Self-Employed Bankruptcy: Unique Issues

If your small business is conducted through a private corporation and you are a director, you must resign the directorship. If the business is viable it can perhaps continue without your involvement but such is the exception not the rule. Usually when the director of a small corporation resigns, the business ceases to operate and its assets are dealt with by the creditors of the corporation. In addition to personal liabilities being covered by your personal bankruptcy, so too will your liabilities as a director such as unpaid HST, employee source deductions, claims by employees and creditor claims that you have guaranteed personally.

If you are self-employed or operate your business as a sole proprietorship, the assets and liabilities of the business are yours as an individual. Subject to provincial “tool-of-trade” and personal exemptions, all the business assets and your personal assets will form part of your bankruptcy and almost all liabilities whether business or personal will be covered by your bankruptcy.

In either of the above situations, you can continue to earn a living subject to the surplus income guidelines imposed by bankruptcy law which guidelines allow you to retain a certain proportion of earnings depending upon your after-tax income and the number of persons in your household.

If you make the decision to earn a living after bankruptcy as a self-employed individual rather than as an employee, you must understand that obtaining credit should you need such to operate will be virtually impossible. For those businesses that have irregular income this can become a real challenge and may very well lead to further financial failure.

Other Debt Management Options for Small Business Owners and the Self-Employed

In light of the impact on small business owners and self-employed individuals, bankruptcy isn’t always the best option. Spergel also offers consumer proposals as an alternative to bankruptcy depending upon your personal situation. Consumer Proposals are an offer to your creditors to repay a portion of your debt over a maximum of five years. This alternative, if accepted by your creditors stops all interest charges and legal process brought against you and allows you to focus on the repayment of all or a portion of your debt. It is better than bankruptcy for your credit score and doesn’t impact your ability to be a director of an incorporated business.

Consumer Proposals are a great way to allow you to pay off debt in a more manageable way. For small business owners, this also means that business assets will remain unaffected and credit may still be available. Spergel can help you find the best option for you and your small business.

If you are a small business owner or self-employed individual considering bankruptcy, contact the debt professionals at Spergel. Spergel will outline the options available to you and help you deal with your debts in a way that right for both you and your business.

Contact us today!

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Duties of a bankrupt. What are they?

Your duties after filing for bankruptcy

You’ve met with a trustee in bankruptcy and have decided your best solution is to file for bankruptcy.  Once you have signed the paperwork and the Bankruptcy is filed, there will be an automatic “stay of proceedings” which stops all of your creditors from taking any further collection action.  You will then be breathing easier since all collection calls and notices will have stopped.  At that point you may feel as if the process is complete and you can move on with your life.
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Can I keep a credit card when filing bankruptcy or a consumer proposal?

A question that is frequently asked during consultations is whether they can keep a credit card when filing bankruptcy or a consumer proposal.  The question usually is about a credit card with a low or nil balance. You may want to keep it for any unforeseen expenses that may arise, as well as for particular instances where credit cards are needed, such as flight or hotel bookings.

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