Am I Legally Obligated to Pay Debts Obtained by Collection Agencies in Canada?

Question from harry, Am I Legally Obligated to Pay Debts Obtained by Collection Agencies in Canada?

Answer from AI:

In Canada, if a debt is legally valid, you are generally obligated to pay it, even if it has been sold to a collection agency. However, the specific circumstances surrounding the debt and the collection process can influence your legal obligations.

Understanding Debt Collection in Canada

In Canada, when you owe money to a creditor and fail to pay it back, the creditor may sell or assign your debt to a collection agency. The collection agency then has the right to pursue you for the payment of the debt. This is regulated by provincial laws such as the Collection and Debt Settlement Services Act in Ontario, or the Business Practices and Consumer Protection Act in British Columbia.

Legal Obligations and Limitations

• Statute of Limitations: Each province has a statute of limitations that sets a time limit for how long a creditor or collection agency can sue you for the debt. This period varies from two to six years depending on the province. After this period, the debt is considered “statute-barred,” but it doesn’t mean the debt is erased. The collection agency can still contact you to pay it back, but they can’t sue you for it.
• Proof of Debt: If a collection agency contacts you about a debt, you have the right to request proof that you owe the debt and that they are authorized to collect it. If they can’t provide this proof, you may not be legally obligated to pay the debt.
• Disputed Debts: If you believe that you do not owe the debt or the amount claimed is incorrect, you can dispute it. In such cases, it’s advisable to seek legal advice.

When to Seek Legal Advice

If you’re facing debt collection and are unsure about your legal obligations, it’s a good idea to consult with a legal professional. They can help you understand your rights, the validity of the debt, and whether the collection agency is following proper procedures. Legal advice is particularly important if:

1. You believe the debt is not yours or the amount is incorrect.
2. The debt is old, and you believe it may be statute-barred.
3. You’re being harassed by the collection agency.

Remember, while this information provides a general understanding of your legal obligations regarding debt collection in Canada, it’s not a substitute for legal advice. Always consult with a legal professional for advice tailored to your specific circumstances.