When do collection agencies give up?

Posted on 20 September 2021

Written by Colin Boulton

Receiving harassing calls from collection agencies or being pursued for overdue debts is probably one of the most stressful situations in life. It is one thing being caught up in overwhelming debt, but another when you are being chased to pay back the debt by often intimidating collection agencies. That said, it is important to note that there are a number of rules collection agencies must abide by legally, including the times of day during which they can contact you. Knowing your rights with collection agencies as a debtor is a crucial first step. Being aware of this as well as how to stop collection agencies contacting you can be empowering. So, when do collection agencies give up?

When do collection agencies give up?

If you have debts that are overdue, and you know you cannot afford to pay them back on time, it is likely that a debt collector or a collection agency will contact you. This may be sporadic initially, but for many these calls can feel like harassment on top of an already incredibly stressful situation. It can often feel like you want to avoid answering your phone for fear of speaking to a collection agency, and they may also be turning up at your home unannounced. It could even be that they are threatening you with wage garnishment, at which point you must speak to a Licensed Insolvency Trustee immediately. When it comes to knowing how long a collection agency will collect on a debt in Canada, this is dependent on your province of residence. Below per province, we have listed when collection agencies will typically give up. Generally speaking, in Canada no collection agency can pursue legal action on a debt after six years of it being acknowledged, although it varies per province.

When do collection agencies give up in Ontario?

Legally, the limit of debt collection in Ontario is two years. This is good news for debtors in the province, as it is much less than the countrywide policy of six years. Therefore, if you have debt in Ontario that you cannot afford to repay, collection agencies have just two years to pursue legal action against you on any said debt. The exception to this rule is if you pay towards the debt or acknowledge it, the time period of two years is reset. During this time, you must keep the same contact details or indeed inform your creditors of a change else the two year period will also be reset. Do note that after this period, you still owe the debt; it is just that you cannot have legal action pursued against you. Any debts will remain on your credit report for a minimum of six years.

When do collection agencies give up in Alberta?

Similarly to Ontario, in Alberta the limit of debt collection is two years. Once again, after this time period creditors can no longer pursue legal action against debtors, even though the debt is still owed. This likely means creditors will not try to chase you as their threat is no longer able to leverage legal activity. Do note that this two year period can be increased by up to a decade should you have a court judgement placed against you before the end of the time period.

When do collection agencies give up in British Columbia?

Much like Alberta and Ontario, the time period for collection agencies and debt collectors in British Columbia to pursue legal action for their collections is two Much like Alberta and Ontario, the time period for collection agencies and debt collectors in British Columbia to pursue legal action for their collections is two years, much less than the national protocol. Just like the aforementioned provinces, creditors and collection agencies may not threaten you with legal action after this time period despite the fact you will still owe the debt.

When do collection agencies give up in Saskatchewan?

Saskatchewan is another Canadian province that offers collection agencies and debt collectors less time than the national legal limit of six years. In Saskatchewan, collection agencies are permitted two years to pursue legal action against debtors. Once again, this is based on no acknowledgement or payment towards the debt, which could indeed reset the time period for which collectors have to pursue legal action.

New Brunswick also allows collection agencies and debt collectors just two years to pursue legal action. For Quebec, they have three years. For Manitoba, Newfoundland, Labrador, Nova Scotia, Prince Edward Island, and the territories, they are allowed six years as per the Canadian legal limit. After this point, any legal action threatened is an empty threat.

Can collection agencies call you at work?

It is important to know your rights when it comes to collection agencies to give you the confidence you need should they be harassing you. This includes whether or not collection agencies can call you at work. This in turn can help to reduce the stress of the situation overall, allowing you to focus on gaining debt relief. Collection agencies and debt collectors are indeed able to contact your employer to confirm your employment information. Other than this, they cannot speak to your employer for any other reason without your written consent, unless it is regarding a wage garnishment. In this scenario, you should contact a Licensed Insolvency Trustee immediately to resolve the situation.

What to say to collection agencies

Knowing what to say to debt collectors when you receive a call is an important part of knowing when collection agencies give up. It can be extremely stressful receiving a call – at times, they can be blunt and aggressive. Handling collection agencies in the right way can help you to stay calm and ensure you ask the right questions. There are a number of things to bear in mind when you receive a call from a debt collector:

  • Find out who is calling – it is important to determine whether it is the creditor themselves or a debt collection agency on their behalf
  • Get more details on the debt – ensure it is definitely debt that you owe and ensure you receive written confirmation
  • Confirm the debt collector’s information – dealing with the same collector each time simplifies the situation and makes negotiation easier
  • Ensure you get a receipt for any payments made – this acts as proof and helps you to keep track of any payments you make
  • Verify any debt requests you receive – you should ensure any collectors that contact you are registered and that any debt requests are legitimate

How to stop collection agencies contacting you

In order to legally stop collection agencies and debt collectorIn order to legally stop collection agencies and debt collectors from contacting you, you need a stay of proceedings to be in place. A stay of proceedings is the legal prevention of creditors from pursuing debtors for any money owed. When instated, it is often a huge relief for debtors and they can rest assured knowing that any harassment or contact made by creditors is now illegal. There are two primary ways to generate a stay of proceedings:

Filing a consumer proposal

In Canada, a consumer proposal is the only legal form of debt settlement. Requiring a Licensed InIn Canada, a consumer proposal is the only legal form of debt settlement. Requiring a Licensed Insolvency Trustee to administer a consumer proposal, a bankruptcy trustee will discuss with you an affordable amount for you to repay each month. They will then negotiate with your creditors to confirm a monthly payment amount, in return for the remainder of your debt to be wiped. This can often mean that your overall debt is reduced by up to 80%. Further advantages of a consumer proposal include being able to keep your assets, and a stay of proceedings. Once you have filed a consumer proposal, your creditors are no longer legally allowed to contact you or harass you for payments. At Spergel, you will be assigned your own bankruptcy trustee to walk you through each step of the process.

Filing bankruptcy

Along with filing a consumer proposal, filing bankruptcy in Canada follows the law laid out in the Bankruptcy and Insolvency Act. Bankruptcy is the act of assigning any applicable non-exempt assets over to a Licensed Insolvency Trustee in exchange for clearance of your debt. It offers debtors huge relief by offering them a fresh financial start. It also triggers a stay of proceedings, meaning creditors can no longer pursue legal action including wage garnishments. Contrary to popular belief, when you file bankruptcy you are able to keep some essential assets, depending on the province in which you live. Spergel is a trusted bankruptcy firm which has helped over 100,000 Canadians gain debt relief.

If you want to know ‘when do collection agencies give up?’, it may be time for you to reach out to a Licensed Insolvency Trustee to help. Together, we can discuss your financial circumstances and help to stop collection calls. It is important to remember there is always a solution to debt, and there is a debt relief option to suit everyone. You will soon realize you may have been better off seeking help sooner because of the huge weight lifted once collection agencies stop contacting you. At Spergel, our team is here to help you.

To stop collection agencies or debt collectors contacting you, or to stop a wage garnishment, book a free consultation with Spergel today. Our team of reputable Licensed Insolvency Trustees are here to help you by recommending a debt relief solution, and have been administering consumer proposals and bankruptcy for over thirty years. You owe it to yourself.


Colin Boulton

Colin Boulton is a Chartered Accountant and Insolvency and Restructuring Professional with over 20 years’ experience as an LIT (Licensed Insolvency Trustee). He is also our resident expert on unemployment and wage garnishments and manages Spergel's offices in Eastern Ontario (including Oshawa, Peterborough, Lindsay, Ajax and Scarborough). When not at the office helping clients cross their debt-free finish lines, Colin enjoys training for and participating in triathlons.

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