Too many debts? We can help!
At some point, everyone is faced with financial problems. It doesn’t matter how much you make, or even who you owe—if you haven’t got enough money, someone is not going to get paid.
If it's a short-term problem, you can probably weather the storm, but if it goes on month after month, sooner or later, you're going to face some hard choices.
What happens if I don't pay?
Depending on your general payment history, your creditors (the people to whom you owe money) will allow you to miss a single payment and their response will be a letter politely requesting payment. If you miss a second payment, the letter will be more insistent and it might be followed by a phone call. It's when you miss the third payment that trouble typically begins. In most cases, your account will be turned over to a collection agency for processing.
How do I deal with a collection agency?
First and foremost - remember that the person from the collection agency is calling because you haven't paid your bills. They want to know why you haven't paid and, more importantly, when (or if) you are going to pay.
The collection agent's job is to get money from you. Period.
How can I stop them from calling?
Most people try to avoid the collection agent's calls and ignore their letters - not that this strategy solves the problem. In fact, it usually makes things worse. If the collection agency doesn't think you are going to co-operate with them, they may just deal with your account in the courts. If you're ignoring their calls and letters, you are not going to know that they've started a court action and you'll probably miss the hearing. If you miss the hearing, the judge won't hear your half of the story and will, therefore, award the collection agency whatever they ask for. Usually, collection agencies request the right to garnishee your wages. In Ontario, a garnishee can be up to 50% of your net pay.
How do I stop a garnishment?
If a creditor has gone to the trouble of garnishing your wages, they are not likely to lift the garnishment because you agree to pay - they only garnishee people with a history of not paying.
Once a garnishment starts, there are only four ways to get it to stop:
- Repay the debt
- Create an acceptable debt management plan
- File a proposal
- File bankruptcy