Do collection agencies have the right to take debtors to court?

Yes, they can serve debtors any time and pursue the case in court. Such actions are extreme and are not used at the first attempt to get the money back. Most creditors send collectors to follow up with borrowers, and they will place several calls and emails before heading to the court eventually. The collectors can be allowed to act on behalf of the creditors during the entire court process.

It is never a good idea to ignore debt collectors when they start reaching out. Communicating with them to explain why you are unable to make payments is the best course of action. If you don’t want to talk to them, write a letter or email explaining your situation, including the payments you can make and what you expect them to do. This may be a better method because it allows you to keep copies of all the information exchanged during communication.

What to expect in case of failed payments

The most common action from collectors usually involves endless calls. When a debtor fails to pay, it will be the main form of communication, but other methods like emailing are also rife. Collectors are relentless and go to extreme lengths to threaten with lawsuits.

Since they are also bound by laws, they have to be careful when dealing with debtors to ensure the communication does not turn to harassment. At the same time, they are allowed to sue debtors that ignore their communication attempts. Learning about the rules in your area may help you understand the limits that collectors will be willing to go.

The minimum amount a collector can sue for

The legal fees and time necessary for a lawsuit force creditors and collectors to think about such action carefully. Most of them will not go to court if the money in question does not guarantee profits because they will likely suffer losses. They have to think about cost-effectiveness first.

According to a survey done on the issue, most lawyers in Canada charge $10,000 or more for a lawsuit. As such, creditors must be selective with the clients they issue such threats.

How long will the collection agency try to get the money back?

Collectors can try to recover their money indefinitely because they only get paid when they meet their targets. So long as their attempt is not constituted as harassment, they will keep calling you until they succeed in their quest. Time limitation is on their ability to sue debtors. Ontario and other provinces have set the statute of limitations that starts when a debtor acknowledges the loan.

In Quebec, the statute is three years from the time the debt is acknowledged. In Alberta, Nova Scotia, British Columbia, Ontario, New Brunswick, and Saskatchewan, it is two years from the time of debt acknowledgement. Other provinces like Labrador, Manitoba, and Prince Edward Island have it at 6 years. In most of these areas, the limitation does not begin on the last payment date, even though that is sometimes seen as a way of acknowledging the debt.

Most people don’t know about the statute of limitations in their regions, and some debt collectors try to capitalize on that by threatening them with lawsuits long after the time has passed. You have to learn the rules regarding debt collection in your area to be able to tell off a persistent collector that is breaking the law. If they continue after you inform them that the time has passed, you can report to the consumer protection office.

What to expect in case of a lawsuit

If you get served, the best action will be to file a Defence within 20 days at the courthouse mentioned on the Statement of Claim. Failing to file a Defence shows that you have accepted the charges, and you are not willing to dispute them. The creditor will get a default judgment, which may lead to the seizing of your assets or a lien.

Those willing to fight back will fill Form 9A and attach all relevant documents to support the claim. The form allows debtors to admit they owe the full or partial amount and propose a payment plan, even if it means paying small amounts until the full debt is paid. The debtor will also cater to the filing fees, then wait for the court to respond through an email. The court clerk can help clarify the necessary steps to be followed.

Where to get help in case of a court case

Various types of professionals are involved in the court process. Some provide guidance, and others are there for support.

Certified Credit Counsellor: These are professionals who can help you understand the full extent of the situation and how to handle all the steps. They can analyze the financial situation and possible repercussions to give you a clearer picture of what awaits you. The best part is, they don’t normally charge for their services. A credit counsellor can also help you figure out the best course of action as you explore several options, including debt consolidation. The main aim when working with them is to avoid bankruptcy.

Small Claims Court Duty Counsel Services: These are lawyers who work with low-income people that are interested in representing themselves in court. They usually work on a pro-bono basis, but they have some criteria that potential clients must meet before they can take the case.

Paralegals: The Law Society of Upper Canada has a list of paralegals/lawyers that can assist in debt cases. They operate like regular lawyers and may be willing to help for free.

JusticeNet: This is another not-for-profit entity that helps those who need legal advice but cannot afford regular lawyer fees, and at the same time, their income is considered too high for legal aid. More information about what they do is available on their website , and their offices are in Ontario.


Being summoned to court can be very scary, especially when you don’t have any professional experience with such cases. Not knowing what to expect or do makes the situation worse. In most cases, such situations lead to wage garnishments, but if handled correctly, you can avoid losing all your money. Talk to your creditors and agree on a suitable payment plan that will allow you to make small payments over a more extended period. Make sure the agreement is in writing.

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