Navigating the world of toll roads and their associated debts can be daunting, especially when it involves something as significant as the 407 ETR. Ontario’s 407 ETR Highway is a quick and convenient way to get around the GTA, both for those that use it for business or leisure, and especially when compared to the super busy 401. Despite its convenience, it does come with a fee – and this surprises a lot of drivers, especially given that it is the only toll road in Ontario. If you’ve found yourself grappling with 407 ETR debts, you’re not alone. This article will break down everything you need to know about handling and resolving 407 ETR debts effectively, and how here at Spergel, we can help you to reduce those debts for much less than what you owe.
What is the 407 ETR?
The 407 ETR (Express Toll Route) is a major toll highway in Ontario, Canada, that stretches from Burlington to Pickering. It’s operated by a private company, 407 ETR Concession Company Limited, and is known for its electronic toll collection system. Unlike traditional toll roads, the 407 ETR uses transponders and cameras to track vehicles and collect tolls, making it a convenient but potentially expensive option for frequent travellers.
How do 407 ETR debts work?
407 ETR debts typically arise when a vehicle owner fails to pay the tolls incurred while using the highway. Since the 407 ETR operates on a pay-per-use basis, it’s crucial to keep track of all tolls and payments. Failure to do so can lead to accumulating debt, including late fees and administrative charges. Canadian drivers can accumulate 407 ETR debts for the following reasons:
- Neglecting toll payments: if you don’t pay the tolls within the stipulated time frame, your debt can quickly accumulate.
- Administrative errors: mistakes in billing or problems with the transponder can lead to unexpected charges.
- Lack of communication: if you’ve changed addresses or contact information, you might not receive the toll bills in a timely manner.
- Increased charges: delays in payment can result in additional fees, which exacerbate the debt situation.
What if you get an unexpected 407 bill?
407 ETR tolls are automatically billed based on your usage. The highway charges are calculated per kilometer, with variations depending on the type and weight of your vehicle. Instead of traditional toll booths or collection machines, the system employs electronic sensors to track your entry and exit points. A bill is subsequently sent to the address where the vehicle is registered. While this modern system eliminates the need for physical toll collection points, it can also result in unexpectedly high bills. There have been, for example, notable cases, like a business owner receiving a staggering $30,000 bill. These bills can accumulate over several years and may go unnoticed if they are sent to an outdated address. Additionally, some people might choose not to pay due to financial constraints or a lack of understanding of the consequences. Business owners, in particular, might be surprised to find significant tolls accumulated by employees or partners using commercial vehicles. Given the prevalent issue of high household debt in Canada, receiving an unexpected 407 ETR bill can further strain already tight finances.
What are the consequences of unpaid 407 ETR debts?
Unpaid 407 ETR debts can have serious repercussions, including:
- Increased debt: late fees and administrative charges can significantly increase the amount of debt owed.
- Legal action: the 407 ETR has the authority to take legal action to recover unpaid tolls, which may involve court proceedings.
- Credit impact: unresolved debts may affect your credit rating, making it harder to secure loans or credit in the future.
- Vehicle impoundment: in severe cases, your vehicle may be impounded as a measure to enforce debt collection.
What are the collection powers of the 407 ETR?
When tolls go unpaid, interest accrues rapidly, with the 407 ETR imposing nearly 27% interest on overdue accounts. If the debt remains unsettled, the 407 ETR has several measures it can take, some of which are distinctive among creditors in Ontario:
- You’ll receive a notice of default and a demand for payment, detailing potential further actions.
- A collection agency may be engaged to pursue the debt on the behalf of the 407 ETR.
- The 407 ETR can take legal action to obtain a judgment that permits them to garnish your wages. This is when your wages are deducated at source via your employer, with the funds going towards your debt repayment.
- The 407 ETR has a unique option to inform the Registrar of Motor Vehicles about your outstanding payments. This can result in a license plate denial, preventing you from renewing your vehicle permit through the Ministry of Transportation.
Many Canadians only realize the full extent of their unpaid 407 bills when they attempt to renew their license plate and discover they are unable to do so.
How long does the 407 ETR have to pursue legal action?
To garnish wages or access bank accounts, creditors must secure a court judgment, which authorizes them to collect directly from your employer or bank. However, there are specific time constraints and conditions that limit their ability to pursue these actions. In Ontario, the Statute of Limitations for debt collection, often referred to as the limitation period, is two years from the date of the last payment made. If no payments are made on a debt for two years, creditors are prohibited from initiating legal actions such as wage garnishment. Due to the high cost of legal proceedings, creditors, including the 407 ETR, generally do not pursue wage garnishment for smaller amounts. Neglecting to settle your debt, however, can still lead to significant consequences, including negative effects on your credit history and credit score. Even after the limitation period expires, the debt itself does not disappear. Although legal collection actions may no longer be feasible, the debt will still impact your credit rating and could affect your ability to obtain future credit. If a collection agency takes over the debt, they may attempt to restart the limitation period by encouraging you to make a payment. If you do so, the period resets, allowing them to pursue more stringent collection efforts.
How do you resolve 407 ETR debts?
There are a few steps you should take to resolve any 407 ETR debts you have:
- Review your statements: carefully examine your toll statements and invoices. Ensure that all charges are accurate and that you have not been billed for any errors or duplicate charges.
- Contact 407 ETR: if you have discrepancies or issues with your account, reach out to 407 ETR’s customer service. They can help clarify charges and may offer payment arrangements.
- Dispute errors promptly: if you believe there has been an error in the toll charges or billing, formally dispute the charges with 407 ETR as soon as possible. Prompt action can prevent further complications.
- Monitor your account: regularly check your account and statements to ensure that all charges are accurate and that payments are processed correctly. This proactive approach can help prevent future debt issues.
- Negotiate a payment plan: if you’re unable to pay the debt in full, negotiate a payment plan with 407 ETR. They may be willing to set up a manageable installment plan based on your financial situation. If you have a high bill, the 407 ETR will typically try to settle the debt rather than collect the amount in full. There is a financial hardship plan for those who qualify and owe over $1,000 in 407 ETR debt. This allows individuals to make monthly payments over time without accruing additional interest or further collection action. To qualify, you need to share relevant information and have a credit check. The payment plan can still be expensive – it requires a 30% downpayment and monthly repayments, so it’s not beneficial to everyone.
- Seek professional help from a Licensed Insolvency Trustee: if your debt situation is overwhelming or you can’t afford the 407 ETR’s financial hardship program, consider consulting a reputable Licensed Insolvency Trustee. They are the only professionals in Canada legally able to file all forms of debt relief, and can provide guidance on budgeting and debt resolution strategies. You can schedule a FREE, no-obligation with Spergel to discuss your financial circumstances and your debt relief options. We’ve been helping Canadians for 35 years.
Can 407 debts be discharged?
The debate over whether 407 ETR debts qualify as unsecured debt and therefore eligible for discharge in a consumer proposal or bankruptcy was so significant that it was escalated to the Supreme Court of Canada. Prior to the Supreme Court’s decision, the 407 ETR invoked a provision in Ontario’s Highway 407 Act to argue that 407 toll debts should remain enforceable despite a bankruptcy discharge. A pivotal ruling by the Supreme Court established that the Bankruptcy and Insolvency Act takes precedence over Ontario’s Highway 407 Act, affirming that 407 ETR debts are indeed considered unsecured. Unsecured debts are not tied to specific assets. They encompass liabilities like credit card debt, payday loans, and lines of credit. This means that although creditors can pursue legal measures such as wage or bank account garnishment for non-payment, these debts can be discharged through insolvency, offering relief to the borrower.
How to gain debt relief from 407 ETR debts
Discovering you have 407 ETR debt on top of other financial obligations can be overwhelming, especially if you’re already managing high credit card balances, student loans, a line of credit, or tax debt. It can feel like the final straw in an already stressful financial situation. In this scenario, we highly recommend booking a free consultation with a reputable Licensed Insolvency Trustee. They will help you to explore your insolvency options, which may include bankruptcy or a consumer proposal. These processes allow you to pay only a portion of your total debt, with the remaining balance being discharged, or to eliminate your debt completely. A consumer proposal offers relief from interest rates and lets you repay unsecured debts through manageable monthly payments. Bankruptcy, on the other hand, may require you to surrender certain assets and make additional payments based on any surplus income, but it will result in the discharge of any remaining debts. A Licensed Insolvency Trustee will help you identify the most appropriate solution for your circumstances. It’s important to note that only insolvency provides a legally binding resolution for all your creditors.
How can you avoid future 407 ETR debts?
To avoid accumulating debt in the future, here are some recommended tips:
- Keep your contact information updated: ensure that 407 ETR has your current address and contact information to receive timely bills and notices.
- Monitor your transponder: regularly check that your transponder is functioning correctly and that your account is adequately funded.
- Plan your routes: consider using alternate routes if the tolls become too burdensome, or if you’re not travelling frequently enough to justify the cost of using 407 ETR.
Dealing with 407 ETR debts can be challenging, but understanding the system and taking proactive steps can help you manage and resolve these issues effectively. By reviewing your statements, communicating with 407 ETR, and seeking professional advice if necessary, you can navigate the complexities of toll road debts and work towards a resolution. Book a free consultation with a Licensed Insolvency Trustee at Spergel for personalized advice and support.