Can Ignoring Your Creditors Make Your Debt Go Away? 

debt collection calling

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By Jennifer Abrahams  | Reading time: 8 minutes, 15 sec | 1707 words | | Last update: 2024/03/20

Many years ago I was a collections agent for a car loans company. My job was basically to bother people until they paid us what they owed. No one wanted to hear from me, which gave me a bit of a complex, but I couldn’t really blame them!  

It’s tempting to avoid collection calls, but does that make the debt go away?  

Is ignoring your debt collection calls a good idea?  

When it comes to debt collection calls, it is never clever to ignore them. In fact, it may make things a lot worse for you. The debt collector may file a collections lawsuit in court, which could lead to the garnishing of wages, seizure of personal property, or money taken from your bank accounts. They may call your employer, family, or other contacts you provided when you applied for the credit. Even if a debt collector stops calling, your credit score could still be affected, limiting your ability to borrow in the future.  

What could happen if you ignore your creditors?  

Creditors have the legal right to collect debt and these are some of the ways they can do so, whether or not you answer the phone:     

  • Filing with their collection department, whose full-time job is to collect outstanding payments.

  • Hiring out to a debt collection agency (a company that helps companies recover money that is unpaid) for payment on the company's behalf.  

  • Selling your debt to a debt collection agency, who generally earn a percentage of what they collect.  

  • Filing a collections lawsuit in court. 

  • Garnishing your wages. 

  • Seizing your personal property. 

  • Taking money from your bank accounts 

Debt collection calling

How long is a debt collector allowed to pursue the collection of a debt in Canada?  

We might think that ghosting a collector will make them eventually give up, but that’s not the case. The regulations about debt can vary across the country, so it is important to understand your province's regulations. If there are no rules in your province, the federal rules apply. Federal regulations indicate a debt collector has 6 years from the last payment to take collection or legal action against you.   

When talking to your debt collectors, you should have all the information and know what the debt collector is and is not allowed to do. Even though there is a period that they may file or take you to court, this does not mean the debt is forgiven. Some debts are exempt from the regulations, meaning they never go away.  

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Which Debt Has No Time Limitations?  

 While this is not an exhaustive list, here are some of the most common types of debt that have no time limits: 

  1. Secured debts like mortgages, vehicle loans, loans for travel trailers, and the like. Any loan for something that can be held for collateral.  

  2. Unsecured debt where the creditor has a judgement against the client. While there is often a limited timeframe, these judgments are often renewed. 

  3. Debt where the creditor has initiated a lawsuit against the client before the limitation time has passed.  

  4. Any type of spousal or child support (including overdue payments), which remains owing even after a child has turned 18.  

  5. Any debt that has been a result of fraud, embezzlement, or misappropriation.  

  6. Any type of fines that are from court like traffic violations and others.  

  7. Any money that you owe the government, such as CRA debts (taxes, overpayments, other). These types of payments are never forgiven.  

  8. Debt that is unsecured where typically the creditor has a judgement against the client.  


Are debt collectors allowed to take money from bank accounts or garnish wages?  

Debt collectors can sue on behalf of creditors. If they win and receive a judgment against you,  they can garnish your wages and take money from your bank accounts. What they can do and how much they receive depends on your income and assets as well as the amount of the debt.  

 How do financial institutes have the right to collect? How does the “right of offset” work?  

The “right of offset”, also known as a “right of set-off” means a financial institution can use any deposits by the creditor to pay any amounts owed to them such as credit cards or loans. Most banks have a clause on any accounts, credit card agreements you sign which then gives them this permission.  

When a right of offset is used, the bank can take money from your personal chequing account if your credit card is in arrears to get back what is owed to them. They do not need your consent, or even your knowledge, because of the agreement you sign. If the amount in your account does not cover the entire debt, they do not need to leave you with a positive balance.  

This offset could leave you short of funds to cover other payments like upcoming cheques or automatic payments. You may then be charged a NSF (Non-sufficient funds) fee for each payment that does not go through, adding further to your debt. This can also apply to any joint accounts you have.   

How long do collection activities stay on a credit report?  

Collection activities stay on your credit file for six years, starting from the date of your last payment, even if the full balance has been paid. As a result, your credit score, and therefore ability to borrow funds in the future, can be significantly impacted.  

Options when you are unable to pay off your debt

When it comes to debt there are several options if you are unable to pay it all in full. 
These include: 
1. You may negotiate a settlement with the collection agency by offering to pay a portion of the debt owed and requesting that the remaining unpaid balance be written off.  You may request from the creditor or collection agency that the debt be removed from your report immediately as part of your settlement agreement. 

2. You could pursue a debt management plan through a credit counselling agency. If you have the financial ability to repay the debt in full but require more time, this might be a good option. One disadvantage to this approach is that you will be required to pay the debt in full whereas other debt relief options you may have the ability to negotiate to have a portion of your debt forgiven.  

3. There is a government debt relief program available called a Consumer Proposal.  Consumer Proposals are only offered through Licensed Insolvency Trustees, and are an excellent option if you're overwhelmed with debt and do not have the capability to pay it off in full. As part of the Consumer Proposal, your Trustee will negotiate a settlement on your behalf directly with your creditors, which could reduce your debt by up to 80%. You will have up to five years to pay off the total agreed amount through a single, easy to manage monthly payment, and as soon as you sign on, the program provides you protection from your creditors. Once your obligations have been completed the remainder of the debt will be forgiven, and you will be able to start rebuilding your credit.  

The best option for you will depend on your individual situation including total debt owed, your assets, your income and your ability to pay off any debt. Speaking to a professional will help guide you on your options and determine which option truly is best for you. 

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What happens if I make a partial payment to the collection agency? 

While it may seem like a good idea to make a partial payment to the collection agency it will have a significant impact on your credit report. Once your debt has been sent to a collection agency there will be long lasting consequences on your credit report making it difficult to obtain credit until the debt has been cleared and removed from your credit report. It is important to be proactive when it comes to outstanding debt to protect your credit. 

Is there any way to stop collection activities or wage garnishees?  

The ideal way to stop this activity is to pay the debt. However, what if you don’t have the funds to pay?  

A consumer proposal, administered by a Licensed Insolvency Trustee like Bromwich+Smith, will stop all collection activities. Any legal actions must immediately halt, including wage garnishees, collection calls, and legal proceedings. A proposal is a powerful legal agreement that will eliminate the debt in collections as well as any other debt that is included  . A consumer proposal usually reduces debt to only a fraction of the original amount owed, and it is legally binding on your creditors. Any legal actions will immediately stop, including wage garnishees. All creditors, including credit cards, bank loans, payday loans, and more, can be included in a proposal. A proposal is interest-free and can be paid over a five-year period. 

To learn more about the collection agencies in Canada click here

If you have debt collectors calling and/or are struggling to make your payments, contact a licensed professional for a FREE confidential consultation on how to get debt collectors off your back! Our Debt Relief Specialists are available by phone at 1.855.884.9243, or you can request a call back via our contact us page. There is no need to travel to a local office. Licensed Insolvency Trustee, Bromwich+Smith, is now offering video appointments, with all services available from the comfort of your home.    


1. What could happen if you ignore your creditors?

Ignoring creditors can lead to various consequences including legal actions such as filing collections lawsuits, garnishing wages, seizing personal property, and impacting credit scores.

2. How long is a debt collector allowed to pursue the collection of a debt in Canada?

Debt collectors in Canada generally have 6 years from the last payment to take collection or legal action against you, according to federal regulations. However, provincial regulations may vary.

3. Which debts have no time limitations?

Debts with no time limitations include secured debts like mortgages, debts with judgments against the client, debts with pending lawsuits, spousal or child support payments, debts due to fraud or embezzlement, court fines, and government debts like CRA debts.

4. Are debt collectors allowed to take money from bank accounts or garnish wages?

Debt collectors can take legal action to garnish wages or access bank accounts if they win a judgment against you. The extent of action depends on factors such as income, assets, and the amount of debt owed.

5. How long do collection activities stay on a credit report?

Collection activities stay on a credit report for six years from the date of the last payment, impacting credit scores and future borrowing ability.

6. What options are available if I am unable to pay off my debt?

If you're unable to pay off your debt, you can consider negotiating a settlement with the collection agency, enrolling in a debt management plan through a credit counseling agency, or opting for a Consumer Proposal program through a Licensed Insolvency Trustee. Each option has its own advantages and eligibility criteria, so it's important to assess your individual situation before deciding.

7. What happens if I make a partial payment to the collection agency?

Making a partial payment to the collection agency may seem like a step in the right direction, but it can have significant consequences on your credit report. Once a debt is sent to a collection agency, it will have long-lasting impacts on your credit until the debt is fully cleared and removed from your report. It's crucial to address outstanding debt proactively to safeguard your credit.

8. Is there any way to stop collection activities or wage garnishments?

The most effective way to halt collection activities or wage garnishments is to pay off the debt. However, if you're unable to do so, a Consumer Proposal administered by a Licensed Insolvency Trustee can provide relief. A Consumer Proposal stops all collection activities and legal proceedings, including wage garnishments, and allows you to negotiate a reduced repayment plan with your creditors. It's a legally binding agreement that can significantly reduce your debt burden and provide a fresh financial start.

Related blog 

1-What to do if you have collectors calling? 
2-Top 6 questions asked about collection agencies in Canada? 
3-Get debt collectors off your back! 
4-How can I Stop Collections from Calling Me?

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