Can debt collectors take you to court?

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In Canada, debt collectors can take you to court, but they usually avoid this due to high costs. They’ll likely pursue legal action only if it’s financially worthwhile. Provinces have timelines, like Ontario’s two-year limit after a last payment, for how long they can pursue the debt.

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Debt Collector Court Question

Can debt collectors take you to court? If I owe money, is it possible for debt collectors to file a lawsuit against me?

From: Anonymous Question
Location: Richmond, British Columbia (BC)
Category: debt management plan

Debt Collector Court Answer

Sure thing! In Canada, if you owe money and haven’t paid it back, the folks tasked with collecting your debt can, in fact, take you to court to try and get their cash. The twist? They usually won’t jump straight to legal action because it can cost a pretty penny on their side with things like lawyer fees and stuff. They’ll only consider this route if they think what they’ll get back is worth more than what they’re spending. Oh, and every region has its own timeline, called a statute of limitations, which is the window for how long they can legally bug you about the debt. Take Ontario, for example—it’s got about a two-year grace period following your last payment or acknowledgment.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, debt collectors can take you to court if you owe money. If a debt collector believes you have not paid your debt, they have the legal right to file a lawsuit against you to seek recovery of the outstanding amount. This is outlined in the Bankruptcy and Insolvency Act, which provides guidelines on the processes related to debts and court actions.

Additionally, creditors can also take legal action under relevant provincial laws. If a court finds in favor of the creditor, it may issue a judgment against you, allowing them to take further collection actions, such as wage garnishment or bank levies.

From: OSB Helper

Related Questions to Debt Collector Legal Action

Here are the top 5 most frequently asked questions related to the topic of debt collectors taking individuals to court, based on common concerns and online search trends:

1. Can debt collectors take me to court?

Yes, debt collectors can take you to court if certain conditions are met, such as the debt being significant enough to cover legal costs and you having assets or income to pay off the debt[1][5].

2. What happens if a debt collector takes me to court?

If a debt collector takes you to court, possible outcomes include a default judgment if you fail to respond, a settlement agreement, or a court order to garnish your paycheques or seize your assets[1][3].

3. How long do debt collectors have to sue me?

The statute of limitations for suing varies by province: 2 years in Alberta, British Columbia, New Brunswick, Nova Scotia, Ontario, and Saskatchewan; 3 years in Quebec; and 6 years in Manitoba, Newfoundland and Labrador, Prince Edward Island, and the Territories[1][5].

4. What should I do if I am served with a civil claim from a debt collector?

If served with a civil claim, you should talk to your creditor, pay the claim, or file a dispute note within the required time frame (20 days in Alberta if served within the province, one month if served outside Alberta)[3].

5. Can I avoid going to court with a debt collector?

Yes, you can avoid going to court by reaching a settlement agreement with the creditor, filing a consumer proposal, or ensuring the debt is past its limitation period[1][4][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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