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How to Deal with Collection Agencies: Your Rights Explained
- Senga Bailey
- Jan 27
- 4 min read
Many Albertans may feel overwhelmed when debt collectors begin contacting them, especially if they are unsure of their legal rights or what steps to take next. As a result, calls or letters from a collection agency can feel stressful and intimidating. The good news is that collection agencies must follow strict rules under Alberta law, and you have clear rights designed to protect you.
This guide explains how to deal with collection agencies, what debt collectors legally can and cannot do, and when it may be time to seek professional debt help.
Understanding Collection Agencies in Alberta
Collection agencies act on behalf of creditors to recover unpaid debts. These debts may include credit cards, lines of credit, payday loans, or utility bills. While collectors are allowed to contact you, their actions are regulated by Alberta’s Consumer Protection Act and Collection and Debt Practices Regulation.
According to national consumer data, over 30% of Canadians report feeling anxious or stressed due to debt, and collection activity is one of the most common triggers for seeking financial help. Understanding your rights can reduce fear and help you regain control. While collection agencies are regulated, only a federally licensed Insolvency Trustee is authorized to provide legal debt relief solutions such as consumer proposals or bankruptcy in Canada.
What Collection Agencies Can and Cannot Do
What Debt Collectors Are Allowed to Do
Collection agencies in Alberta may:
Contact you by phone, email, mail, or text during permitted hours
Ask for repayment or propose payment arrangements
Contact your employer only to verify employment information
Take legal action, such as court proceedings, if the debt is valid and unpaid
What Debt Collectors Cannot Do
Debt collectors are not permitted to:
Harass, threaten, or intimidate you
Use abusive or misleading language
Contact you at work if you’ve asked them not to
Call outside permitted hours
Discuss your debt with family, friends, or coworkers
Threaten legal action they cannot legally take or intend to pursue
If a collector violates these rules, you have the right to file a complaint with Service Alberta.
How to Stop Debt Collectors Legally
Request Communication in Writing Only:
One of the simplest ways to reduce stress is to request that a collection agency communicate with you in writing only. Once requested, they must comply, except to notify you of legal action.
Verify the Debt:
You have the right to request proof of the debt. This ensures:
The debt is accurate
The agency is legally authorized to collect it
The amount has not been inflated with improper fees
Never agree to payment until you fully understand what you owe.
Can Debt Collection Agencies Take You to Court?
Yes, debt collection agencies can take legal action, but only if they meet the following conditions:
Have a valid debt
Be within the legal limitation period (generally two years in Alberta from the last payment or written acknowledgment). This limitation period may reset if a payment is made or the debt is acknowledged in writing.
If a lawsuit is filed, ignoring it can lead to judgments, wage garnishment, or frozen bank accounts. Therefore, timely action is critical.
When Collection Calls Signal a Bigger Problem
Collection activity is often a sign that your debt has become unmanageable. Some common triggers include:
Missed payments across multiple accounts
Interest growing faster than payments
Constant stress or anxiety about money
In situations like this, many Albertans can benefit from reviewing formal debt relief options that can provide structure and relief.
SCB Debt Solutions: Debt Relief Options That Stop Collection Calls
Debt Counselling:
Debt counselling helps individuals organize their finances, develop a realistic and sustainable budget, and better understand their debt repayment options. Through this process, our clients gain clarity around their income, expenses, and financial priorities, which can reduce stress and improve decision-making. This option is most effective in the early stages of financial difficulty, when debt levels are still manageable and collection activity has not yet escalated.
Consumer Proposals:
A consumer proposal is a legally binding debt relief option that allows you to repay a portion of your unsecured debt over an agreed-upon period of time. Once filed, it provides immediate legal protection by stopping collection calls, freezing interest, and preventing wage garnishments or legal action. Consumer proposals are ideal for individuals who are able to make affordable monthly payments, but are unable to repay their full debt due to high balances or accumulating interest.
Bankruptcy:
Bankruptcy is a formal legal debt relief solution for individuals who are unable to realistically repay their debts, even with reduced payment options. Once filed, it provides immediate protection by stopping collection actions, including wage garnishments, lawsuits, and ongoing creditor contact. For many Albertans facing significant financial hardship, bankruptcy can offer the quickest and most structured path toward regaining financial stability.
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You Don’t Have to Face Collection Agencies Alone
Dealing with debt collectors can feel isolating and overwhelming, but it’s important to remember that you have clear rights and options under the law. Whether you are receiving early collection notices or facing more serious legal pressure, understanding your protections and available solutions is an important first step toward financial relief.
If collection agencies are contacting you, taking action sooner rather than later can help you regain control and reduce unnecessary stress.
Our Licensed Insolvency Trustee helps Albertans understand their rights, stop collection calls legally, and choose the debt solution option that fits their situation, without judgment or pressure.
Book a free, confidential consultation with SCB Debt Solutions today and get clear guidance on how to stop collection calls legally and regain control of your finances.