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Do large credit card companies ever forgive debts or significantly discount them particularly in the case of an unemployed student?

Without all the details it is difficult to reply to your question. Having said that settlements by any creditor depends on various factors.  The persons age, income or employment status, total debt picture and assets are all taken into consideration on decisions to accept settlements.  The credit rating is also taken into consideration by the creditor.  The creditor has to decide if a settlement is more than what would be recovered by taking legal action or waiting until the persons financial situation improves.  It should be approved by the creditor if it makes sense to take a settlement than a long protracted payment program.  It is our belief that whenever a debtor is co-operative and honest with their creditors on the reason for a settlement the chances of acceptance should be increased.   Consumers should put their best offer on the table first and not get caught up in the typical cat and mouse game of seeing how much the creditor will accept.  The consumer should also disclose the source of the settlement funds.  A loan from a family member is a lot different than a consumer taking funds out of their savings account. In cases where the creditors are un-co-operative or the consumer requires unbiased advise they should seek the help of The Credit Counseling Society of BC. to assist them in working out an arrangement with the creditors. Their website is at www.nomoredebts.org Also their website has links to offices across Canada. As a last resort their are trustees in bankruptcy that can provide advise in making proposals.  Lastly, when a settlement is agreed upon, the consumer should always get it in writing that the creditor accepts the sum as “settlement” and agrees to abandon the remaining balance. If you require further clarification, please contact the writer at my office.


I had purchased a bank draft from a bank in Canada about a month ago and mailed it to the recipient. Due to personal reasons the recipient has not deposited the bank draft and will be unable to do so for the next month. The problem is that now I’m having trouble with the bank which issued the bank draft. I have a loan with them which is overdue and they have been making noises about taking legal action. My question is can the bank cancel the draft and take the money without my permission?

It is my understanding that a draft is payable to a third party. The Bank cannot cancel the draft without the original draft and without your permission. Any debt owing to the Bank has nothing to do with buying a bank draft or money order.

A Bank can put a stop payment on a draft but there has to be some serious reasons such as fraud.

If you have credit problems you should speak with your bank about them and possibly they will provide some guidance to help you through your temporary problem. If that fails go to the website nomoredebts.org

 


Am I entitled to a receipt from a collection agency when I’ve paid my account in full?

THANKS FOR YOUR QUESTION:

Our policy at ICA Ltd. is to advise all debtors when sending a cheque or money order to ensure the funds are always payable to the Creditor. Although we have a trust account, it is our preference that the debtor always makes payments in the Creditor’s name to avoid problems when a collection agency is engaged for several creditors at the same time.  Also, we stated previously that when (settlements) are agreed upon, the consumer should always get it in writing that the Creditor accepts the sum “as settlement” and agrees to abandon the balance.

The Consumer can order a copy of their personal Equifax Bureau report by going to this link Credit Report Request Form. Follow the instructions on the form and your Equifax bureau form will be sent to you at no charge.  Give it at least two weeks after paying out an account to order your Bureau, to ensure the Collection Agency has reported the account as paid.  Some agencies might wait a couple of weeks to ensure the payments clear your bank account before reporting the account as paid to the Credit Bureau. The writer also  forwarded your question for input as it relates to the Debt Collection Act to the Director of Debt Collection for the Province of B.C

His response is as follows:

Both the Debt Collection Act and its Directives are silent about issuing receipts for payments.  However, I would likely consider the refusal to issue a receipt for a cash payment to be an unreasonable collection practice.  If the debtor pays by cheque, money order, or bank draft, there should not be a requirement for a separate receipt since the payment instrument used will serve as proof of the payment.  I would apply this policy to all payments made by a debtor,  including the last payment.

Morris Redecopp
Director of Debt Collection
Director of Credit Reporting
Compliance & Regulatory Branch
Consumer Services Division
Ministry of Public Safety & Solicitor General
PO Box 9297 Stn Prov Govt
Victoria  BC  V8W 9J8
Tel:    250.356.6035
Fax:    250.953.3533
Email:  morris.redecopp@gems1.gov.bc.ca

We trust this meets with your satisfaction but, if you have any other questions, please do not hesitate to contact the writer.


Are parents responsible for their adult children’s debts? Collection agencies keep phoning us, but we never signed anything for them.

In response to your enquiry, the answer is no, if the parents did not guarantee or co-sign a loan or credit card for their adult children. Possibly, they were given as a reference to the loan application and that is the reason the collection agency is calling them. I would suggest that a parent fax the creditors/agent involved to advise that the adult child in question does not reside with them, does not receive mail at their address, and the creditors are no longer authorized to contact them by letter or telephone.

The parent should advise their adult son or daughter to contact the creditors to work out a solution to their financial problems. In cases where the creditors are unco-operative or the consumer requires unbiased advice, they should seek the help of The Credit Counseling Society of BC to assist them in working out an arrangement with the creditors. Their website is nomoredebts.org This website has links to offices across Canada.

On July 5, 2004, responsibility for oversight of business practices and consumer protection in British Columbia was delegated from the Ministry of Public Safety & Solicitor General to the new independent Business Practices and Consumer Protection Authority, or BPCPA.

If the collection agency does not comply with your request, you can make contact with Business Practices and Consumer Protection Authority (BPCPA) through their website. Enter the BPCPA site. Or to Call for general consumer information and complaints regarding a consumer issue in BC.
Phone: 604 320-1667
Toll Free: 1 888 564-9963
Fax: 250 920-7181
Email: info@bpcpa.ca

On the website you can then download the  BUSINESS PRACTICES AND CONSUMER PROTECTION ACT

Go to Part 7- Debt Collection Division 1 – Prohibited Debt Collection Practices and Section 117 states the following:

The Act clearly defines the processes a Collection Agency in BC must follow is pasted below:

Communication with persons other than debtor 117 (1) Except for the purpose of obtaining the debtor’s home address or telephone number, a collector must not communicate or attempt to communicate with a member of the debtor’s family or household, or a relative, neighbour, friend or acquaintance of the debtor unless

(a) the person contacted has guaranteed to pay the debt and is being contacted in respect of that guarantee, or

(b) the debtor has authorized the collector to discuss the debt with the person contacted.

(2) A collector must not communicate with a debtor’s employer except

(a) for the purpose of confirming the debtor’s employment, business title and business address, or

(b) for other purposes authorized in writing by the debtor.

We trust this answers your question.  Please call the writer if you require further clarification.


I live in Ontario, Canada. I have a Canadian Tire credit card $7400, TD Canada Trust $5600, Sears Card $600, Leon’s card $3400, Mortgage $1200 a month. Should I see a credit counselor and get the interest removed from the credit cards or is there another option? I don’t want to go bankrupt and my wife is presently bringing in $400 a month and I am bringing in $1900 a month.

If you are unable to refinance to consolidate your debts, then you may wish to seek the assistance of:

Credit Counseling Canada / Conseil de Credit du Canada (CCC), is a national association of not-for-profit credit counseling agencies and Orderly Payment of Debt programs from all across Canada. The website link is www.creditcounsellingcanada.ca You can put in the province in which you are residing.

Trusting this will put you on the right track and help solve your financial problems.  Should you have further questions, please contact the writer.


I am small business owner who finds myself as a non-secured creditor to an incorporated company (another small business) to the tune of 17k. The company has just closed its doors and (appears to have voluntarily) hired a trustee. What is the most viable option that I have to recover this money? Should I go through a collections agency?

It is difficult to provide the correct answer without asking a lot of questions. If we reviewed your file, it would be much easier to give you a better answer. You do not want to engage a collection agency if you are a secured creditor.

Is the debtor a limited Company, Proprietorship, or Partnership? Do you have a personal guarantee from the principal of the company? How long has this client dealt with your firm? This type of information could have a bearing on how you should proceed.

If the company did engage a trustee in bankruptcy, that information should be available to you, either by contacting the debtor company or looking for a notice of bankruptcy at the debtor company’s location. You should contact the trustee in bankruptcy as they are there to assist you in the process. Some debts are not discharged in bankruptcy. Secured creditors are generally not affected by a Bankruptcy Petition. Other debts, such as court-ordered restitution or fines, or alimony and child support, for example, are not discharged in a bankruptcy. Also, debts arising from misrepresentation or fraud are not discharged. However, the ability of an unsecured creditor to collect debts arising as a result of criminal activity or court ordered fines may require an application to court and should be discussed with legal counsel in the appropriate jurisdiction.

A creditor can oppose the discharge of an individual bankrupt debtor for a number of reasons, for example: the bankrupt fails to comply with the duties of a bankrupt, as outlined in the Bankruptcy & Insolvency Act. This does not apply in the situation of a bankrupt corporation. At all times, you should obtain the Creditors’ package and file a Proof of Claim to ensure you are informed as the bankruptcy progresses. Also, you may be entitled to a dividend in the bankruptcy, so it is critical to always file a Proof of Claim.

Sometimes a trustee is engaged by a secured creditor company to act as a receiver in order to enforce a security agreement against the assets of a debtor company.  Or a trustee may act as a ‘trustee in bankruptcy’ in order to file a bankruptcy petition against a debtor company, even if there are no assets.  In the latter case, you will need professional advice.

In the event that formal proceedings (eg. bankruptcy, receivership, etc.) has not been started, it is important that you take the correct steps to maximize your recovery.

When a debt is assigned to my firm for collection, we charge between 35-50% of the recovery.  No collection-No charge.  If you believe that your chances of a recovery improve enough to justify the commission, you should assign the file.  If you visit our website, you should go to File a Claim section. You can then view the benefits of assigning the accounts on collection with my firm. Below the benefits, there is a form to complete when assigning a collection account on-line. The terms and conditions will appear for you to print.

Our office receives the account information by email. Once received, someone from my firm will contact you to review the terms and conditions of the assignment.

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