Debt Collection is something that no one wants to do. Having someone owe you money is frustrating, time consuming and the cost of collecting sometimes outweighs the benefits. The following outlines the steps taken to secure payment for money that someone owes you. If you have questions or need help in collecting a debt, please call. Our litigation lawyers offer a full range of debt collection services in Calgary and Edmonton.
Types Of Debts
Most Albertans incur some form of debt. While there are numerous forms of debt, most debt is categorized into a few main types: secured debt, unsecured debt, revolving debt and mortgages. Secured debt is any debt that is backed by one of your assets for collateral purposes. In contrast, an unsecured debt does not not have collateral and is often given on faith that the borrower will repay the loan as promised. Revolving debts, on the other hand, is an agreement between the lender and the borrower wherein the borrower can borrow up to a maximum amount of money on a recurring basis, like a credit card. Finally, mortgages are the most common form of debt and a loan for the purpose of buying a home. a few examples of debts include:
- Personal Loans
- Damage to Property
- Unpaid Sale Proceeds
- Promissory Notes
- Estate Debts
- Unpaid Rents
Steps To Debt Collection
Many steps to debt collection exist. In most cases, people run through each step. In other cases, people skip steps, or mix up the order. No magic exists in many of the steps and none guarantee repayment. The following steps often make up a typical debt collection situation:
The first step is always asking for what the debtor owes you. Frequently, a person calls or emails the debtor asking for payment. Often, if the debtor has the ability to pay, they make payment.
Next, involves a formal demand letter. People sometimes send these themselves. Often, when a lawyer drafts and sends the demand letter, the debtor pays more attention to the demand.
The demand letter should address: a concise description of the history of the dispute; what you are seeking from the other side and why; how the other side can respond to your demand; how much time the other side has to respond to your demand; and lastly, the consequences of failing to comply with your demand.
Remember, in a demand letter a person has the right to threaten to sue the debtor. Threatening something other then suing them, may fall under Canadian extortion laws.
Serving A Civil Claim Or Statement Of Claim
Third, is the filing and serving of a claim. A Civil Claim is one made in Provincial Court. This is sometimes called small claims court. A statement of claim is a claim in the Court of Queen’s Bench. Picking which court is right for you usually depends on the amount of money owed to you. In Alberta, a limit exists for how long you have to file the claim. Always file your claim withing two years. Once filed, the claim must be served on the debtor within a year. If you miss the limitation period, your ability to proceed with debt collection may be severely limited. Since exemptions and when the limitation period starts includes some exemptions, contact a lawyer as soon as you realize the debt is outstanding.
Judgment On Debt Collection
Assuming you win at trial, you then receive a judgment. The official judgment allows you to move on to the next step in the collection process.
Collecting On Your Judgment
Collecting on your judgement is the next step. You now have a piece of paper that officially states that the debtor owes you money. Several mechanisms exist to help with this part of debt collection. For example, these include garnishing wages, garnishing bank accounts, and selling off assets of the debtor.
Ways Lawyers Help With Debt Collection
List things we do: demand letter, limited scope retainer (a la cart services) where we help you conduct your own debt collection, etc.
Call Kahane Law Office For Help With Debt Collection
When collecting debts, it is important to follow the correct protocols to avoid problems. Our lawyers will take the necessary steps required to seize goods properly. We are able to act for the sole purpose of seizure or as part of a great picture of collection of secured or unsecured debts. Call today so that we can help you with your debt collections legal needs. You can reach us at 403-225-8810 or email us directly here.