When Loan Collectors Are Breaking Bad

31 Oct

If you are struggling from month to month to pay for your necessities, there may be some bills you can’t afford to pay. Naturally, in a survival situation housing, food, and utilities must come first, and debts that are unsecured come last. Unethical debt collectors for these type of debts can become belligerent and even threatening. You should be well aware of their tactics and know what your rights are when dealing with them.

Collection Agencies and Bad Behavior

When you are several months behind on a debt, your creditor may turn your account over to a loan collection agency.  These agencies often collect a percentage and forward the rest of your payments to the creditor or they may purchase the debt for a percentage of the original amount and they become your creditor. Most loan collectors work within the law but there are a few that don’t.

There have been reports of loan collectors contacting people and harassing them about debts they don’t actually owe or that they have already paid. People sometimes pay these false debts because they are afraid, don’t know what else to do, or can’t remember whether they paid or not.

Some debtors have complained that loan collectors have shown up at their homes in the wee hours of the morning to harass them, called their homes and places of business/employment, repeatedly, and even started calling their relatives. Sometimes collectors misrepresent themselves as legal professionals or officials and even threaten to have debtors thrown into jail and have their children taken away from them or worse.

Some collectors also make bogus offers to free you from the debt if you pay a portion of it. After you send a payment they start coming after you again and rescind their original offer or they turn over your remaining debt to another collection agency.


There are plenty of laws in place to protect debtors. It is illegal for debt collectors to:

  • Call between 10 pm and 7 am or on Sundays. (Some provinces have different times.)

  • Call more than three times in a week.

  • Misrepresent who they are, like telling you they are lawyers or police.

  • Discuss your debt with your friends and relatives.

  • Use threatening or profane language.

  • Lie about doing things that are beyond their power.

  • Lie about you having a debt (that you don’t actually owe) or about the amount of the debt.

Your Rights and Protections

If you receive a offer to pay off a portion of your debt, or just the debt amount without extra fees and you want to do this, be sure to pay with secured funds. You will be wise to put “Debt Paid In Full” on the money order or cashier’s check and make a copy of it.

Whenever you are presented with a debt that you do not believe you owe, you can send a certified letter to dispute the debt or request proof of it. You can also demand that they cease calling you anymore and tell them to only contact you by mail, or to talk to your lawyer, even if you owe the debt.

The only time it is legal for debt collector to discuss your debt with any of your friends or family is when one or more of them was involved in obtaining credit with you, or was a co-signer on the debt.  

When debt collectors cross over the line you should contact the provincial authorities for assistance in resolving this issue. If anyone is threatening your safety or that of your family, you should contact the police.

If your debts are very large and you face several creditors and loan collection agencies threatening legal actions against you, you will need to face facts and take action. To stop garnishments, repossessions, and harassment you should seek a free consultation with a bankruptcy attorney or a company like Harris and Partners to find out how to get a fresh financial start.

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