Legal advice. Student debt, collections, banks.

[Flame On]

Hi there anyone have any legal knowledge of the following:
Long story but, went to university in the UK, accrued student loans and a student over draft.
Moved back to canada and lost track of the debts, again long story.
Now a Canadian collection agency has turned up, and says they've bought the debt of the English banking institution.
Any thoughts about whether a Canadian agency can enforce the debt from a foreign banking institution?
I.e. how far will the agency be able to go with this?
Any advice would be great.

[RougeUnderoos]

I have no legal knowledge of anything. But...

I doubt they would have "bought" the debt if they didn't have a rock-solid case to do whatever it is they do to collect.

See if you can't just deal with the bank directly. I had a collection agency sicced on me once (by the Alberta Government, no fault of my own, honest) and I just paid them and ignored the collection agency. That was a long time ago though.

[troutman]

You will have to fly me to London to do some "research" before this question can be properly answered.

[Gozer]

Hookers and blow.

[CaptainCrunch]

The one benefit of dealing with a collection agency (well its not a benefit because usually your credit is screwed once a collection agency is bought into play), is that you can negotiate with them in terms of payment amounts. When I was much younger, I got into a situation where a collection agency was involved, and I negotiated a $0.50 on the dollar payout on it since they had bought the debt at $0.20 on the dollar.

Don't avoid the collection agency because they tend to file with the courts very quickly if they feel they are being avoided.

See if there's negotiating space, tell them that your broke and would like to see if you can reduce the debt load or work on a payment plan with them.

In terms of the collection agency being able to enforce a foreign banking debt, yes they can, they own the debt now.

[ken0042]

I'm no lawyer, so take this for what it's worth.... but I believe that there is a limitations of 2 years that somebody can persue legal action to collect on a debt in Alberta. Now with this being a debt from the UK, may not apply. But the most important thing I was told was that you cannot acknowledge the debt; or else the clock starts all over again. Meaning don't give them $20 to keep you current, and don't communicate in writing anything about "I plan to pay you."

One collection agency once tried to get me to apply to 2 banks for loans to cover the debt, and if I get regected send them the letters, and they had "something they could do for me." I didn't do it at the time because my bank had never pulled my credit report (which was shot back then) and I really didn't want them to know I was a deadbeat. Turns out that ended up saving me.

[CaptainCrunch]

Originally Posted by ken0042

I'm no lawyer, so take this for what it's worth.... but I believe that there is a limitations of 2 years that somebody can persue legal action to collect on a debt in Alberta. Now with this being a debt from the UK, may not apply. But the most important thing I was told was that you cannot acknowledge the debt; or else the clock starts all over again. Meaning don't give them $20 to keep you current, and don't communicate in writing anything about "I plan to pay you."

One collection agency once tried to get me to apply to 2 banks for loans to cover the debt, and if I get regected send them the letters, and they had "something they could do for me." I didn't do it at the time because my bank had never pulled my credit report (which was shot back then) and I really didn't want them to know I was a deadbeat. Turns out that ended up saving me.

Your right on the two year limitation, and the clock restarting. The only thing to really worry about is the effect on your credit if you try to avoid restitution or contacting them to negotiate pay out.

No collection agency should ever try to get you to apply to a bank for loans, or ask you to provide a letter of rejection. One of the best things to do is go to credit counciling, some of them have a service where they will work with the collections agency on your behalf to work out a satisfactory payment schedule.

[pylon]

I was 74k in debt when I was 23, I had a failed business which I had put a lot of personal guarantees on. Long story short, I ended up basically having destroyed credit by 25, and so many calls from bill collectors I was seriously comtemplating suicide. I was actually geared up to do it one night. They can be so frikkin mean and derogatory to you.

Anyway, I ended up contacting this place called Bill Mccollough and Associates and filed a consumer proposal. Basically they set a court date to meet with your creditors and negotiate a settlement i.e 50 cents on the dollar or whatever. Its basically a last resort before bankruptcy, but the courts recognise is as a better scenario for both parties since the creditors always fair better than if you declare, and your credit isn't hurt as bad. So by law, if the creditors do not show up at your court date they have basically waived their the right to collect anything from you since you are trying to benefit them more than the alternative of bankruptcy where they essentially get zero.

So by the time everything was said and done I ended up having to pay about $23,000 of the 74 k over a period of 2 years. And the company that represented me collects and distributes the funds to the parties that showed up at the hearing which was only like half of them. That and once you proposal is accepted they collection agencies can no longer call you. I managed to pay it off in about a year, and it was the biggest relief in the world not having to deal with bill collectors anymore. It only took a year or so after to repair my credit to the point where I could get a car loan/morgtage etc. at reasonable rates. The whole thing cost about $1400 and they built it into my proposal.

If it gets as bad for you as it did for me I highly recommend this over going banko since the banks look at it much more favorably, and it doesn't affect your right to vote, obtain certain jobs etc.. like Bankruptcy can.

Pylon.

[Flame On]

Well from looking on the alberta government website they do seem to have broken some rules already. From the site:
A collector may not:
Pursue a non-judgment debt where the last payment or written acknowledgement of the debt is more than six years old

Give any false or misleading information including references to the police or a law firm, credit history, court proceedings, lien or garnishment or imply that the collector or agency is part of a law firm or legal department of the collection agency or client

They've talked about damaging my credit history and this is a debt that's well over 6 years since any contact was made. I got my degree in 98 so this is a decade old.
They're also not doing a number of other things the alberta gov site seems to suggest they should.
But, if I contact them to tell them they're in breech does that trigger the time and validate the claim? They haven't seemed to pursue this further and it's been about 2 months since first they left a message.
Thanks for the input.

[Flame On]

Thanks pylon, glad it worked out for you!
Mine is less serious, it's only a few grand so not going to ruin me, though it may mean a second job and thus perhaps less CP and Xbox time!

[Burninator]

Someone at my work was in an almost similar situation. He got a speeding ticket when he was in the US. Heard that the government couldn't pursue tickets over the boarder. So he didn't pay it. Then he started getting letters from a collection agency in the US. After that he was getting phone calls from them. He told them that he thought they couldn't go across the boarder for the debt. And they stopped calling after that. That whole process took almost two years, all the while the ticket which was $130 had climbed to $250. He thought it was all over and done with until he went to get a new mortgage a couple years later. The bank told him that he couldn't get a mortgage until he paid his debt (over $500 now) to the collection agency.

[pylon]

Originally Posted by Flame On

Thanks pylon, glad it worked out for you!
Mine is less serious, it's only a few grand so not going to ruin me, though it may mean a second job and thus perhaps less CP and Xbox time!

Great second job.... deliver pizza for a small independant guy. I was pulling down pretty good $100-150/ night cash to pay down my debt. That was about 8 years ago so I dont know if it is so good now. As far as Xbox, I am on live add me if you like, my gamer tag is "sweaty t8nt".

[Flame On]

Originally Posted by troutman

You will have to fly me to London to do some "research" before this question can be properly answered.

That's the legal equivalent of "i need pictures" isn't it? lol

[@theCBE]

Has it been more than 5 years since you incurred the debt in the UK?

[Flame On]

Originally Posted by @theCBE

Has it been more than 5 years since you incurred the debt in the UK?

Yes, twice over.

[@theCBE]

Sorry didn't see your post above where you said the debt is from 98.. the 6 year thing comes from the Limitation Act 1980. I posted the relevant sections below.. basically it means that if you don't acknowledge the debt for 6 years and they don't make any demands for you to pay up the debt fails to exists. If that's the case then the debt that the collection agency bought would be useless. However, if they also have proof that the bank you had the loans with went to reasonable lengths to get in contact with you then it might still stand. As for what they can do to your credit rating I'm not too sure.

5. Time limit for actions founded on simple contract.

An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued

6.— Special time limit for actions in respect of certain loans.

(1) Subject to subsection (3) below, section 5 of this Act shall not bar the right of action on a contract of loan to which this section applies.

(2) This section applies to any contract of loan which—
(a) does not provide for repayment of the debt on or before a fixed or determinable date; and

(b) does not effectively (whether or not it purports to do so) make the obligation to repay the debt conditional on a demand for repayment made by or on behalf of the creditor or on any other matter;

except where in connection with taking the loan the debtor enters into any collateral obligation to pay the amount of the debt or any part of it (as, for example, by delivering a promissory note as security for the debt) on terms which would exclude the application of this section to the contract of loan if they applied directly to repayment of the debt.

(3) Where a demand in writing for repayment of the debt under a contract of loan to which this section applies is made by or on behalf of the creditor (or, where there are joint creditors, by or on behalf of any one of them) section 5 of this Act shall thereupon apply as if the cause of action to recover the debt had accrued on the date on which the demand was made.

(4) In this section “promissory note” has the same meaning as in the Bills of Exchange Act 1882.

[Flame On]

Originally Posted by @theCBE

Sorry didn't see your post above where you said the debt is from 98.. the 6 year thing comes from the Limitation Act 1980. I posted the relevant sections below.. basically it means that if you don't acknowledge the debt for 6 years and they don't make any demands for you to pay up the debt fails to exists. If that's the case then the debt that the collection agency bought would be useless. However, if they also have proof that the bank you had the loans with went to reasonable lengths to get in contact with you then it might still stand. As for what they can do to your credit rating I'm not too sure.

5. Time limit for actions founded on simple contract.

An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued

6.— Special time limit for actions in respect of certain loans.

(1) Subject to subsection (3) below, section 5 of this Act shall not bar the right of action on a contract of loan to which this section applies.

(2) This section applies to any contract of loan which—
(a) does not provide for repayment of the debt on or before a fixed or determinable date; and

(b) does not effectively (whether or not it purports to do so) make the obligation to repay the debt conditional on a demand for repayment made by or on behalf of the creditor or on any other matter;

except where in connection with taking the loan the debtor enters into any collateral obligation to pay the amount of the debt or any part of it (as, for example, by delivering a promissory note as security for the debt) on terms which would exclude the application of this section to the contract of loan if they applied directly to repayment of the debt.

(3) Where a demand in writing for repayment of the debt under a contract of loan to which this section applies is made by or on behalf of the creditor (or, where there are joint creditors, by or on behalf of any one of them) section 5 of this Act shall thereupon apply as if the cause of action to recover the debt had accrued on the date on which the demand was made.

(4) In this section “promissory note” has the same meaning as in the Bills of Exchange Act 1882.

Thanks for the input here.
So the layman terms for those clauses and sub clauses is what you mention? The proof that they tried to contact me?

[@theCBE]

Originally Posted by Flame On

Thanks for the input here.
So the layman terms for those clauses and sub clauses is what you mention? The proof that they tried to contact me?

Yes, specifically a demand in writing.

If your loans were through a bank in Scotland and not England then its only 5 years.

[Flame On]

Originally Posted by @theCBE

Yes, specifically a demand in writing.

If your loans were through a bank in Scotland and not England then its only 5 years.

Barclays.
Funny because I had assumed that it was my Student Loans from Glasgow but it turns out it wasn't.
So the question is do i contact the agency and ask them if they have that?

[@theCBE]

Originally Posted by Flame On

Barclays.
Funny because I had assumed that it was my Student Loans from Glasgow but it turns out it wasn't.
So the question is do i contact the agency and ask them if they have that?

I would wait until they contact you again before asking them if they have proof that your original creditors tried to demand repayment. In the meantime I would talk to a lawyer or credit councillor to find out what lengths the collection agency is able to go to get repayment of a purchased foreign debt.

The 6 year limit comes from UK legislation so there is a questions as to what degree a Canadian court will recognize foreign law.

Chances are that the collection agency bought the debt for much less then you actually originally owed. So they may be willing to settle with you for a little bit over their cost.