Common Misconceptions

Bill Collectors and the Police

A bill collector cannot call the police and have you arrested for failing to pay one of your overdue bills.

Responsibility for Debts of Your Spouse

You are not responsible for the debts of your spouse, common-law or otherwise, unless you are a joint borrower, have co-signed the loans of your spouse, or have joint credit cards with your spouse and used your spouse’s credit card.

If your spouse has debt problems and you don’t, your assets are not at risk unless you have co-signed the debt, etc. as mentioned above. Your assets are your assets, and your spouse’s assets are your spouses! Simply being married or in a common-law relationship does not mean that you are liable for each other’s debts.

Canada Revenue Agency has the Ability to Settle your Outstanding Taxes

With the exception of the fairness package, where it is possible to have interest and penalties waived in special circumstances, a tax collector can not negotiate a reduction in your tax debt. Collectors can only collect your debts and are judged by their ability to collect from you.

Bill Collectors Have the Ability to Settle Your Debts

Be careful. Bill collectors are typically paid a percentage of what they are able to collect from you on their client’s outstanding account. A promise to write off the balance of your credit account for a percentage of the debt owed by you to the creditor is only valid if it is in writing and the creditors are part of the agreement. If you are not careful, once you have paid the agreed amount, a new collector could be assigned to collect your debt, and the new collector will proceed against you again to settle the amount of the unpaid balance.

You Can Protect Credit For Later By Paying A Small Credit Card Balance

Once you have taken any sort of protection from your creditors, the fact that you have taken such protection will be recorded on your credit bureau and will likely result in refusal of any credit applications following your “settlement” of debt.

If You Do Not Pay Your Bills, Your Creditors Can Seize All of Your Assets

This comment is simply not true. In Alberta, many significant assets are protected from your creditors by law. The only time that you lose the protection is if you do things that erode such protection. We discuss protected assets elsewhere in this web site under “Exempt Assets”.

Bill Collection Agencies Have the Right to Hassle Me and be Rude to Me Because I Have Not Paid My Bills

Nothing could be further from the truth! Collection Agencies have to be licensed by the Government of Alberta and as such they are responsible to the Government Of Alberta. The licenses are granted under the Fair Collection Practices Act and the Department of Consumer Affairs monitors the collection agencies. They can cancel licenses granted to Collection Agencies if they abuse their collection rights.

If a collector is being rude to you or making threats to you, you should get his name and then ask to speak to his supervisor before referring the collectors’ actions to the government under the Fair Collection Practices Act.