By: Kyle Harris BA.LLB. CAIRP, Licensed Insolvency Trustee
When you don’t pay your bills for a period of time, credit card companies or banks often pass along your debt to a collection agency. Most people know how nasty these agencies can be, but the question is, how much power do they have?
A collection agency has a lot of power if you ignore them for a period of time. They are able to sue you in court and get a judgement against you. If they get a judgement against you, then they can apply to the court to garnish your wages.
File a consumer proposal or bankruptcy
This can all be stopped by filing a consumer proposal or delcaring bankruptcy. Upon filing, you are granted a stay of proceedings. As long as you complete your duties under the bankruptcy or proposal, the collection agency will never be able to come after you again for these debts.