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

Oliver Fire Department. (Submitted photo)
More human caused fires in Oliver

Firefighters have been kept busy putting out several potentional wildfires

Old English design elements can be seen in the sign of the Summerland Farm and Garden Centre in 1993. The guidelines are no longer in place, but some downtown businesses still show aspects of the days when Summerland had a theme in place. This photo was taken by Summerland photographer Dan Dorotich. (Photo courtesy of the Summerland Museum)
Summerland’s Old English theme has been abandoned

From the 1980s until the early 2000s, Summerland had design guidelines in its downtown

Penticton bylaw officers tore down a “pretty significantly sized” homeless camp underneath the bridge near Riverside Drive Friday, April 16 morning. (Brennan Phillips - Western News)
Penticton bylaw tears down ‘significantly sized’ homeless camp under bridge

Many residents had made complaints about the camp before it was torn down

Through their Simple Generosity campaign, Valley First has pledged to donate $1 million of community support to British Columbia communities in 2021. (Contributed)
Valley First rewarding Penticton families with innovative way to thrive together

Participants with ‘inspiring ideas’ will receive a surprise for their family, valued at up to $2,500

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
110 new cases of COVID-19 in Interior Health

Provincial health officers announced 1,005 new cases throughout B.C.

Flow Academy is located at 1511 Sutherland Avenue in Kelowna. (Michael Rodriguez - Capital News)
Black Press Media Weekly Roundup: Top headlines this week

Here’s a quick roundup of the stories that made headlines across the Okanagan, from April 11 to 16

A Western toadlet crosses the centre line of Elk View Road in Chilliwack on Aug. 26, 2010. A tunnel underneath the road has since been installed to help them migrate cross the road. Saturday, April 24 is Save the Frogs Day. (Jenna Hauck/ Progress File)
Unofficial holidays: Here’s what people are celebrating for the week of April 18 to 24

Save the Frogs Day, Love Your Thighs Day and Scream Day are all coming up this week

An Extinction Rebellion Vancouver Island (XRVI) climate change event in 2019 saw a large crowd occupy the Johnson Street bridge. Black Press File Photo
‘In grief for our dying world’: B.C. climate activists embark on 4-day protest

Demonstrators will walk through Vancouver for the first two days before boarding a ferry Sunday morning

A vial of some of the first 500,000 AstraZeneca COVID-19 vaccine doses that Canada secured. THE CANADIAN PRESS/Carlos Osorio
Canada’s 2nd blood clot confirmed in Alberta after AstraZeneca vaccine

The male patient, who is in his 60s, is said to be recovering

Valen a student of Coldstream Elementary writes advice for adults amid a pandemic.
‘We can get rid of COVID together’: B.C. kids share heartwarming advice

Elementary students share their wisdom to adults in unprecedented times

Mervin Mascarenhas giving one of his pens to Honorary JP-MP. Premier David Burt of Bermuda. (Image: Mervin Mascarenhas)
Kelowna man who made $90K ‘Space Pen’ recognized by dignitaries, sheikhs

Mervin Mascarenhas is the first Canadian to grace the cover of Millennium Millionaire Magazine

The funeral of Britain’s Prince Philip in Windsor, England, on Saturday, April 17, 2021. Philip died April 9 at the age of 99. (Kirsty Wigglesworth/AP)
PHOTOS: Prince Philip laid to rest Saturday as sombre queen sits alone

The entire royal procession and funeral took place out of public view within the grounds of Windsor Castle

B.C. Health Minister Adrian Dix and Premier John Horgan describe vaccine rollout at the legislature, March 29, 2021. (B.C. government)
B.C. health minister says delay in Moderna vaccine ‘disappointing’

‘The sooner we get vaccines in people’s arms the better, and inconsistency in delivery is a consistent problem. This is simply a reality and not an issue of blame,’ Adrian Dix said Friday

(Police handout/Kamloops RCMP)
B.C. man dies in custody awaiting trial for Valentine’s Day robbery, kidnapping spree

Robert James Rennie, who was on the Kamloops RCMP’s most wanted list, passed away at the North Fraser Pretrial Centre in Coquitlam

Most Read