Know Your Rights: How to Stop Debt Collectors in Ontario Legally
- Bryan Litvack
- Sep 22
- 5 min read
Introduction
Living under the weight of debt is stressful enough, facing relentless calls and threats from collection agencies only adds to the pressure. Fortunately, Ontarians have strong legal protections when it comes to dealing with debt collectors. Whether you're being contacted about old credit card debt or payday loans, knowing your rights under Ontario law can empower you to take control.
In this comprehensive guide, we’ll explain how to legally stop debt collectors in Ontario, what constitutes harassment, and how you can use provincial and federal laws—including the Collection and Debt Settlement Services Act (CDSSA) and the Bankruptcy and Insolvency Act (BIA)—to protect yourself.
What Are Debt Collectors Allowed to Do in Ontario?
Under Ontario’s Collection and Debt Settlement Services Act, debt collectors are strictly regulated. A registered collection agency is permitted to contact you about a legitimate debt, but there are clear rules they must follow:
They can:
Contact you by phone, email, or mail about a debt.
Call your employer once to verify employment.
Contact friends or family once to obtain your contact information.
They cannot:
Contact you more than three times in a seven-day period.
Use threatening, intimidating, or coercive language.
Discuss your debt with anyone except you (and your authorized representative).
Contact you before 7 a.m. or after 9 p.m., or on statutory holidays.
Violation of these rules is grounds for complaint and enforcement under the law.
Your First Line of Defense: Request Validation of the Debt
You have the right to request written proof of the debt a collector is claiming. This step is vital—many debt collectors pursue time-barred or even non-existent debts.
Send a Debt Validation Letter
Use a registered letter to request:
The original creditor’s name.
Amount owed and date of default.
Documentation verifying the debt.
Important: Until the collector provides proof, they are not allowed to continue contacting you about the debt.
Send a Cease and Desist Letter (Stop Communication Letter)
If you do not wish to be contacted by a collection agency, Ontario law permits you to send a written request to stop all communications.
Under section 22 of the Collection and Debt Settlement Services Act, collectors must stop contacting you except to:
Confirm they won’t contact you again.
Notify you of legal action being taken.
Make sure to:
Send the letter by registered mail or email with a read receipt.
Keep a copy for your records.
Know the Limitation Period: You May Not Owe Anything
In Ontario, debt collection is subject to a 2-year limitation period under the Limitations Act. If it’s been more than two years since you last made a payment or acknowledged the debt, collectors cannot sue you in court.
Note: They can still contact you and ask for payment, but if you assert the limitation period, they cannot legally enforce the debt in court.
How to File a Complaint Against Debt Collectors in Ontario
If a collection agency or collector is violating your rights, you can file a formal complaint with the Ministry of Public and Business Service Delivery.
Steps to File a Complaint:
Gather evidence: call logs, letters, emails, voicemails.
Fill out a Collection Agency Complaint Form.
Submit to: Ministry of Public and Business Service Delivery – Consumer Services.
Agencies found in violation can face fines, licence suspensions, or revocations under the CDSSA.
Understanding Legal Debt Relief Options in Ontario
Sometimes stopping debt collectors is only one part of the solution. If you're facing multiple debts, wage garnishments, or legal threats, you may want to consider formal insolvency proceedings through a Licensed Insolvency Trustee.
1. Consumer Proposal
Under Division II of the Bankruptcy and Insolvency Act, a consumer proposal allows you to:
Reduce your total debt owed.
Make monthly payments over up to 5 years.
Legally stop all collection activity and lawsuits.
Once filed, collection calls must stop immediately as a stay of proceedings applies under section 69.2 BIA.
2. Bankruptcy
If repayment is impossible, filing for personal bankruptcy will:
Eliminate most unsecured debts.
Stop wage garnishments.
Cease legal actions and collections under section 69.3 BIA.
Both options are administered by federally licensed insolvency professionals. Choosing one depends on your income, assets, and long-term goals.
What Is a Stay of Proceedings and How Does It Work?
A “stay of proceedings” is a legal shield that stops all collection efforts once a formal insolvency (proposal or bankruptcy) is filed.
Under the BIA:
Section 69.2 covers consumer proposals.
Section 69.3 covers bankruptcies.
This stay prohibits:
Phone calls from collectors.
Lawsuits, wage garnishments, and bank account seizures.
Any enforcement actions from creditors.
Violations of the stay can result in legal consequences for the debt collector.
Debunking Common Debt Collection Myths
"They said they’ll send the police."
False. Debt collection is a civil matter, not criminal. Police do not arrest people for unpaid credit card bills.
"They can garnish my wages without warning."
Not true. Wage garnishments in Ontario require a court order unless filed through a formal insolvency proceeding. However, the Canada Revenue Agency can garnish your wages without a court order.
"They can seize my house or car."
Only secured creditors (e.g., your mortgage lender) have this power—and it must go through proper legal channels.
When to Seek Help from a Licensed Insolvency Trustee
If you:
Owe over $6,000 in unsecured debt,
Are facing constant harassment despite trying to resolve things,
Feel overwhelmed and unsure of your options
A Licensed Insolvency Trustee (LIT) is the only professional authorized under federal law to provide legal debt relief options. They offer free consultations and will walk you through options like budgeting, proposals, or bankruptcy.
What If the Debt Isn’t Yours? Identity Theft and Errors
If you’re being contacted for a debt you don’t recognize:
Act quickly to dispute it in writing.
Request debt validation documents.
File a fraud report with the Canadian Anti-Fraud Centre and the credit bureaus.
You can also request a freeze or alert on your credit profile to prevent further damage.
Final Thoughts: Take Back Control of Your Financial Peace
Being in debt doesn’t strip you of your rights. Ontario law and Canadian federal legislation give you powerful tools to protect yourself. Whether it’s sending a cease communication letter, challenging collection practices, or filing a consumer proposal, the key is understanding your legal rights and acting decisively.
Remember, you’re not alone. Whether you choose to self-advocate or work with a professional, you have options and support at your fingertips.
If you’re facing debt collectors in Ontario, now is the time to act. Book a free, confidential consultation with a Licensed Insolvency Trustee at the Litvack Group.
Disclaimer:
This article is intended for informational purposes only and does not constitute legal or financial advice. For personalized assistance, contact a Licensed Insolvency Trustee in your area.
Comments