Alberta Debt Collection Laws: How to Stop a Collection Agency

If you borrow money and don’t pay it back on time, you’ll likely be pursued for the money through a debt collection agency.

Debt collection laws differ depending on where you live in Canada, but you have rights that collection agencies must adhere to.

Many Albertans experience abusive debt collection practices and are often not treated fairly. Sometimes, debt collection agencies use threats and lies to get people to repay unpaid debts.

Fortunately, we’ve compiled this handy guide so you know what to expect from debt collectors. Learn how Alberta debt collection laws work, debt collection agency rules, and some typical collection and debt repayment practices.

Debt collection agency meaning

Before we begin, here’s a quick word on what a debt collection agency does.

If you don’t pay back your debt on time, your creditor will try to recover the money you owe by using a third-party debt collection agency or through its own debt collection department.

It’s their job to get the money owed to the creditor and get paid for doing so.

Debt collection agencies will use various methods to recover the money owed, such as phone calls and voicemails, letters requesting payment, and emails.

Initially, you will receive a letter stating that your account is in collections. You’ll likely receive multiple phone calls and emails to request repayment.

If you ignore these requests, a debt collection agency will notify you in writing that legal action will be taken against you. If a collection agency manages to obtain a court order, this can lead to your wages being garnished, assets being seized, or a lien on your property.

Alberta debt collection laws

Debt collection agencies must follow some rules when pursuing Albertans for debt.

Firstly, debt collection agencies, debt collectors and debt repayment agencies must be licensed in Alberta and use the name on their license when speaking to you or sending you any correspondence.

If a debt collector and debt repayment agent contact you, they must provide information about the creditor they represent, the debt in question, when the account was sent to collections, and the amount due.

You are not obliged to reply immediately. It’s a good idea not to acknowledge that you owe the debt, answer questions or provide any personal information until you know the facts.

When it comes to a debt repayment agreement, a debt collector must disclose in writing how much they will charge for a non-sufficient funds (NSF) cheque before submitting it.

And if you make a payment in person (or request a receipt), collection agencies must give you a receipt. This applies to all cash transactions and payments.

If you request an account of the debt, they must provide this, but they only have to do this once every six months. However, if they cannot provide it within 30 days of your request, they must cease collection activity until they can.

Next, we’ll look at Alberta’s contact rules for debt collection.

When can debt collection agencies in Alberta contact me?

Debt collection agencies in Alberta can contact you at home between 7:00 am and 10:00 pm local time on weekdays and Saturdays. They can contact you on Sundays between 1:00 pm and 5:00 pm local time.

How many times a day can a debt collector call in Alberta?

Debt collection agencies cannot contact you more than three times every seven days. This excludes third-party contact, mistaken contact or contact by traditional mail.

Can a debt collector in Alberta contact my friends or family?

A debt collection agency can contact your spouse, partner, relative, neighbour, friend or acquaintance to request your residential address and personal (or employment) phone number.

Can a debt collector in Alberta contact me while at work?

Collection agencies can contact you at work to discuss your debt unless you ask them not to. However, if you don’t want to be contacted at work, you must make other plans to discuss the debt.

Can a debt collector in Alberta contact my employer?

Debt collection agencies can contact your employer once to confirm your employment status, business title, and business address. They are permitted to do so to prepare for legal proceedings (if required).

Debt collection agency rules in Alberta

Alberta debt collection agencies must follow several rules under Alberta law when they attempt to collect payment for a debt.

Debt collection agencies, debt collectors, and debt repayment agencies cannot:

• Harass you, others or your employer with constant phone calls.
• Threaten, intimidate, or put unreasonable pressure on you to repay the debt.
• Mislead you by giving false or misleading information such as references to the police, a law firm, credit history, court proceedings, lien or garnishment.
• Imply that the collection agency is part of a law firm or legal department.
• Threaten legal action if they do not have the legal authority and consent of the creditor to do so.
• Discuss your debt with other people without your express consent. They are allowed to discuss the debt if the person is a guarantor.
• Discuss your debt with a minor child.
• Contact you if you inform them in writing or any other verifiable means that the debt is in dispute and that you wish the creditor to take you to court.
• Continue to contact you if you tell the collector that you are not the debtor unless, after investigation, the agency is convinced you are the debtor.
• Cancel or alter a repayment arrangement if you have complied with the terms of the arrangement and have not misrepresented your financial circumstances or they have not materially changed.
• Contact you more than three times every seven days. This excludes third-party contact, mistaken contact or contact by traditional mail.
• Pursue a non-judgment debt if the last payment or written acknowledgement is over six years old.
• Suggest that a friend, spouse or family member is responsible for your debt or ask them to pay unless she is jointly liable.
• Threaten to physically harm you, your family or your property. If this happens, call the police and inform Service Alberta.
• Seize property if you do not pay your bill. If the agency sues you and obtains a judgment, they may hire a civil enforcement agency to seize your property. Only a bailiff who works for a civil enforcement agency can take property.
• Involve the police or send you to jail.

Source: Alberta government services and information

How long can debt collectors try to collect in Alberta?

If you owe money, a debt collection firm in Alberta can only initiate legal action against you for two years, beginning from the day you defaulted on the debt, acknowledged the debt, or last made a payment.

Creditors, collection agencies and debt repayment agents cannot use legal action to force you to pay if it has been more than two years.

Statute of limitations for Alberta debt and your rights under Alberta law

This is a statute of limitations outlined in Alberta’s Limitations Act. Once this period has passed, a collection agency cannot take further legal action.

Some debts are exempt from this limitation period, such as:

• Government debts such as CRA and student loans.
• Arrears for alimony or child support.
• An award by a civil court for damages.

However, suppose you make a payment towards the debt or recognize that you owe the debt (in writing or by email) before the original statute of limitations runs out. In that case, the time limit is restarted, and it starts all over again.

Can collections take you to court in Alberta?

As soon as the two-year statute of limitations period has passed, collection agencies cannot take you to court. However, they can keep contacting you indefinitely to collect what is owed.

It’s worth remembering that an unpaid debt will appear on your credit history and severely damage your credit score. This information typically appears on your credit report for six years.

As long as the two-year period is still active, you can still be taken to court by the collection agency, and they can get a court judgment, which could lead to wage garnishments or a seizure of assets.

If there is a court judgment before the original statute of limitations expires, this period can be extended to 10 years.

How long before a debt becomes uncollectible?

While a debt never becomes uncollectible, a debt collector has two years from the date you last made a payment or acknowledged the debt.

After this period, the debt is not unenforceable, meaning the creditor cannot legally force the debtor to pay it. There are exceptions to this rule, such as CRA debts. It’s important to remember that a debt collector can still pursue you for a debt regardless if it has been longer than two years.

How to resolve debts in collections in Alberta

There are several ways to deal with a debt collection agency. Firstly, check that the collection agency is legitimate and you owe the money.

Always get the following information from the collection agency:

• Agent’s name
• Collection agency’s name and contact details
• The creditor they represent
• Balance owed
• Date the account was passed to collections.

Tell the collection agency you’ll get back to them after establishing that you owe the money. If you aren’t sure you owe the collection agency or original creditor any money, dispute the debt.

When you know the debt is yours, you can arrange a debt repayment program to stop the debt collection process. Set up a monthly payment plan you can afford, and don’t be pressured into entering into a payment schedule you can’t keep.

Sometimes, you can negotiate a lower amount to settle the entire balance by paying a lump sum upfront, allowing you to save money. Ensure you get a written agreement from the collection agency before any final settlement.

It is also possible to file a consumer proposal in Alberta or declare bankruptcy to stop all collection action immediately.

How to complain about a collection agency in Alberta

If you feel that a collection agency has acted unlawfully, consider making a complaint to the consumer affairs office in Alberta.

Contact the Financial Consumer Agency of Canada if you want to complain about a debt collection department or agency for a federally regulated financial institution.

Wrapping up

Alberta debt collection laws exist to protect your rights if a collection agency comes calling. Speak to a Licensed Insolvency Trustee if you have collection and debt repayment issues and are unsure what to do next.

Share this article