Navigating the debt collection process can be complex, especially when dealing with specific legal considerations in Atlantic Canada. Here’s a step-by-step guide to help creditors and debtors understand what to expect.
1. Initial Contact and Demand for Payment
The debt collection process typically begins with an initial contact from the collection agency, which may include a written notice or phone call. The agency will explain the debt, the outstanding amount, and provide a chance for the debtor to pay voluntarily.
2. Investigation and Validation of Debt
Before proceeding, reputable agencies validate the debt to ensure accuracy. They’ll investigate the claim, review documentation, and ensure all terms align with the initial agreement between creditor and debtor. This step is critical to protect both parties’ interests.
3. Negotiation and Payment Arrangements
Many collection agencies offer debtors an opportunity to negotiate payment terms that suit their financial situation. This could include setting up payment plans or offering settlement options. A reputable agency aims to find mutually agreeable solutions whenever possible.
4. Legal Action (If Necessary)
If voluntary repayment is not achieved, the agency may recommend pursuing legal action as a last resort. This step can involve taking the case to small claims court or another legal venue appropriate for debt recovery in Atlantic Canada.
5. Collection Process Completion
Once payment is received, the agency will provide documentation confirming the debt’s resolution. Businesses can then update their records, and the debtor’s obligation will be considered fulfilled. For example in the Province of New Brunswick Legal Action can only be initiated within two years of the debt being incurred. Otherwise it is too late for this option.
6. Atlantic Canada the Statute of Limitations
The Statute of Limitations can vary from 2 to 6 years depending on the Province. In Atlantic Canada the Statute of Limitations for Debt Collection is 6 years in all four Provinces. This means a debt cannot be pursued after six years from the invoice date or date of last payment.
Learn more on our services page or contact us if you have further questions about the debt collection process.