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Five reasons why you might not have to pay a debt
There are five situations in which you might not have to pay a debt a collection agency claims you owe. In only one of these five scenarios do you have a good defence to your creditor's existing claim that you owe it money. In the remaining four situations you may be able to avoid paying a debt despite the fact that you do not have a valid defence at the present time. It is important to appreciate that failure to pay a debt will likely have negative consequences for you in the future.
1.You have a good defence
A collection agency may be attempting to collect a debt from you for which you are not legally responsible for. It is common for collection agencies to attempt to collect monies from the wrong person in error. It is also very common in Canada for collection agencies to attempt to collect a debt after the expiry of a limitation period. Each year thousands of Canadians pay monies to collection agencies in connection with consumer debts for which they are no longer legally responsible for because the expiry of a limitation period is a complete defence to a creditor's claim.
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Your creditor may not be able to prove the debt is owing
As a practical matter the only way a creditor can legally require you to pay a debt is to successfully sue you and obtain a judgment and then enforce its judgment. There are a number of reasons why a creditor may not be in a position to successfully sue you. The documents needed to prove your creditor's claim against you may have been lost, destroyed or misfiled. In addition, your creditor may not be able to call a witness who is necessary to prove that you owe a debt.
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You may never be sued on your delinquent account
There are a host of reasons why neither a creditor nor a collection agency wants to sue you. Neither your creditor nor a collection agency wants to risk losing money suing you and incurring expenses in circumstances where no monies are recovered from you. However, the fact that a collection agency has no intention of suing you does not prevent it from making repeated threats to sue you for non-payment of your outstanding account.
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Your creditor cannot enforce a judgment against you
Even if your creditor sues you and obtains a judgment against you this is no guarantee that your creditor will ever recover any monies from you. Enforcement remedies available to judgment creditors differ depending upon what province you live in. Creditors have access to limited enforcement remedies attempting to collect monies from residents in certain provinces such as New Brunswick. A judgment creditor will encounter major difficulties recovering monies from a debtor who is judgment proof or in circumstances where the debtor is not judgment proof but the creditor cannot identify the debtor's assets or sources of income.
You may be judgment proof. You may live on social assistance or have a low-paying job and not own any real estate or any assets of any value.
You may not be judgment proof. A creditor who obtains a judgment against you might potentially be able to recover monies from you using enforcement remedies available to judgment creditors in the province where you live. However, your creditor cannot take advantage of these enforcement remedies unless it can identify your assets or sources of income.
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You will acquire a good defence at some future date with the expiry of a limitation period
The limitation period on your consumer debt may have yet to expire and therefore, as of today's date, you cannot rely upon the expiry of a limitation period as a defence to a potential lawsuit brought by your creditor. However, at some point in the future if your creditor does not sue on your consumer debt sufficient time will have elapsed so that you will be able to take advantage of the expiry of a limitation period as a complete defence to your creditor's claim.
To learn more about why you might be able to avoid paying a debt a collection agency claims you owe
You can learn more about how to avoid paying a debt by speaking to Mark Silverthorn or purchasing a copy of Mark Silverthorn's e-book titled A How-to Guide for Dealing with Collection Agencies in Canada .