The Consumer Protection BC inquiry team receives a large number of calls around debt collection each month. Although we have written a few blogs already about this topic, we thought it might be useful to share some tips around debt collection.
If you owe a debt that has now been passed to a collections agency, you will likely be asked to pay off the full amount as soon as possible. Although this may be the best way to avoid incurring any more interest on the account, this may not be an option for some people. Under the Business Practices and Consumer Protection Act, collection agencies are not required to accept payment arrangements. That being said, you have the ability to propose payment arrangements which are agreed upon by both parties. If you find yourself in this situation, you might consider calculating how much you can afford to pay on a regular basis (usually once every two weeks or once per month) and propose this to the agency. If the collection agent agrees to accept these new payment arrangements, request to have this arrangement sent to you in writing prior to making any payments.
Once you receive a letter in writing confirming your new terms and conditions, be sure to make your payments in full and on time. If you are late on a payment or pay less than the negotiated amount, the debt may default back to the original terms and conditions and you may be asked to pay the entire amount off immediately. As in any situation where money transactions are involved, it is best to keep a copy of the proof of payment. This is very important for your own records.