Businesses are getting creative to keep cash flowing. (File photo)

Businesses are getting creative to keep cash flowing. (File photo)

Expect debt collections activity to pick up as economy reopens: experts

Credit Canada and Equifax both say there are already signs of increasing credit delinquencies

Credit experts say Canadian consumers who are in debt should prepare for collections agencies to ramp up their activity as the economy reopens.

Credit Canada, a non-profit credit counselling organization, said Canadian debt collectors have reduced collections efforts over the past year, largely because of deferral programs that were offered to consumers during the pandemic.

“None of the creditors wanted to be accused of being aggressive with collections during the pandemic,” said Keith Emery, chief operating officer of Credit Canada, who said creditors wanted to be conscientious about putting undue pressure on Canadians.

His organization saw a roughly 30 per cent drop in demand for their credit counselling services, but Emery said there are signs of collections resuming in recent months, and that consumers should expect that forgiveness to end when deferral programs start finishing.

“We are already starting to see a slight uptick in activity.”

Data from Equifax showed that only 24 per cent of debt-ridden Canadians who accessed deferral programs this year used the breathing room to improve their credit situation.

While people who are in debt might have some time yet until collections agencies start coming for them, Emery says it’s imperative that Canadians start preparing now to put themselves in a better position to repay any outstanding debts.

“One thing we’ve noticed during the pandemic is a lot of clients have been unwilling to take action on their situation, so they might be carrying debt because… they didn’t feel any pressure to be proactive,” said Emery.

“If that mindset continues and people continue to say ‘I’m not going to do anything until I’m absolutely forced to,’ we’ll definitely hear a lot more stories about collectors.”’

Calls and emails to five collections agencies across Canada from The Canadian Press went unanswered.

Credit Canada and Equifax both say there are already signs of increasing credit delinquencies and action from debt collectors from the end of 2020.

“We would expect that to increase again as the economy reopens,” said Rebecca Oakes, assistant vice president of advanced analytics at Equifax Canada.

She said Canadians who are concerned about their debt having an effect on their credit score should try to at least make minimum payments on all of their accounts.

“Consumers can look at their credit reports free of charge in order to understand which of their accounts are reported to the credit bureau and may affect their credit scores,” said Oakes.

Oakes and Emery also advised Canadians who are struggling with debt to consult with a not-for-profit debt counselling agency, which can often provide their services for free or at a low cost.

If your debt goes to collections, Emery said a counselling agency can ensure you know your rights while helping negotiate a repayment plan.

“There are a lot of rules about what debt collectors can do, but if you don’t know what those rules are then they will exploit your ignorance,” said Emery.

“The No. 1 thing that people can arm themselves with is knowledge.”

He said collections agencies have restrictions around how often they can contact you, what they can discuss if they contact your friends and family, and about the use of threatening language if they contact you.

Debt collectors will also be reluctant to set up a payment plan because it’s in their interest to receive all the owed money at once, said Emery.

That’s where a counselling agency can negotiate on your behalf to help slowly repay your debts.

Ultimately, Emery says consumers will have to face their debts at some point, and said it’s better to act sooner than later.

“You do have to take action, burying your head in the sand is not going to work,” said Emery.

“If you want to build a financial future then you want to get this stuff out of the way.”

Salmaan Farooqui, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

CoronavirusDebt

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Maple Ridge Community Foundation is hosting a trivia night fundraiser on Hit TV. (Special to The News)
Connie Werzun has taken up photography classes, and tok this picture along the dikes at Jerry Sulina Park one night recently. Using a seven-minute exposure, “a photo taken at night looks like it was taken during the day.” (Special to The News)
SHARE: Night photo of mountain range appears as day

Send us your photo showing how you view Maple Ridge or Pitt Meadows, and it could be featured soon.

Raphael Baruh of Slavic Rolls creates one of his Eastern European desserts at the Maple Ridge food truck festival on Saturday afternoon. (Neil Corbett/The News)
Food Truck Festival in Maple Ridge this weekend

Pick the drive-through lane for the food you like at Albion Fair Grounds

Coyotes walk down a Maple Ridge residential street. (Special to The News)
Security camera shows coyotes walking down Maple Ridge street

A warning to Silver Valley residents to keep their pets indoors, says home owner

Coach Ray Wakeman and the Maple Ridge Lawn Bowling Club are looking for new members. (Neil Corbett/The News)
Maple Ridge club looking for lawn bowlers

Games have been modified for safety during COVID-19

B.C. Health Minister Adrian Dix and Premier John Horgan describe vaccine rollout at the legislature, March 29, 2021. (B.C. government)
1,262 more COVID-19 infections in B.C. Friday, 9,574 active cases

Province’s mass vaccination reaches one million people

Two-year-old Ivy McLeod, seen here on April 9, 2021 with four-year-old sister Elena and mom Vanessa, was born with limb differences. The family, including husband/dad Sean McLeod, is looking for a family puppy that also has a limb difference. (Jenna Hauck/ Chilliwack Progress)
B.C. family looking for puppy with limb difference, just like 2-year-old Ivy

Ivy McLeod born as bilateral amputee, now her family wants to find ‘companion’ puppy for her

Emergency crews on scene after a small plane crashed in a grassy area on the northeast side of Boundary Bay Airport Saturday morning (April 10). A freelancer said the plane caught fire and one person was transported to hospital by BC Emergency Health Services. (Photo: Shane MacKichan)
1 taken to hospital after plane crash at Metro Vancouver airport

Plane appears to have suffered ‘significant’ damage, says freelancer

A vehicle that was driven through the wall of a parkade at Uptown Shopping Centre and into the nearby Walmart on April 9 was removed through another hole in the wall later that night. (Photo via Saanich Police Department and Ayush Kakkar)
Vehicle launched into B.C. Walmart removed following rescue of trapped workers

Crews cut new hole in parkade wall to remove vehicle safely

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Four members with Divers for Cleaner Lakes and Oceans were out at Cultus Lake on March 28 and 29 hauling trash out of the waters. (Henry Wang)
PHOTOS: Out-of-town divers remove 100s of pounds of trash from Cultus Lake

Members of Divers for Cleaner Lakes and Oceans hauled out 470 pounds of trash over two days

As of Saturday, April 10, people born in 1961 are the latest to be eligible for a COVID-19 vaccine. (Black Press files)
B.C. residents age 60+ can now register to get their COVID-19 vaccine

Vaccine registration is now open to people born in 1961 or earlier

A new saline gargle test, made in B.C., will soon be replacing COVID-19 nasal swab tests for kids. (PHSA screenshot)
Take-home COVID-19 tests available for some B.C. students who fall ill at school

BC Children’s Hospital plans to provide 1,200 kits to Vancouver district schools this April

Ruming Jiang and his dog Chiu Chiu are doing fine following a brush with hypothermia that saw several people work together to get them out of the Fraser River near Langley’s Derby Reach Park on March 25, 2021 (Special to the Advance Times)
Man finds men who rescued him from drowning in B.C.’s Fraser River

A grateful Ruming Jiang says he will thank them again, this time in person when the pandemic ends

Most Read