Ah, that makes sense. Any place I worked has always contacted outstanding accounts regularly, and if they end up writing off a debt, it’s usually at two years.
I am pretty sure you cannot reset the clock to zero just by attempting to collect the debt. The clock starts running when you incur the debt and never goes to zero.
The same is true for a crime - the clock never goes to zero just because the cops have not solved the crime.
The reason you don’t want to ignore debt and wait for the time to run out is nobody will do business with you if you have a lot of unpaid bills.
You’re right, and I was wrong. What it takes to reset the clock to zero in Cat’s and my jurisdiction is an acknowledgement or partial payment from the debtor. From Alberta’s Limitations Act, R.S.A. 2000, c. L-12 (link here), section 8:
Sorry for any confusion. At any rate, it is possible to reset the clock to zero; it just takes the debtor to do it.
The collection agency will try to reset the clock but that is illegal. That’s just one of the illegal things they will try and they hope you don’t know the law.
Collection agencies, and the things they can legally do (and not do), are specifically spelled out in my jurisdiction. (Cite, and see also the enabling statute here.) You will notice that contacting the debtor in order to obtain an acknowledgement or partial payment is not prohibited; and in fact, is allowed, as long as it done as per the regulation. As for knowing the law, that’s why my clients, both creditors and debtors, retain me. As a lawyer, I’m expected to know it.
A lawyer told me that for collecting debts lawyers are OK to deal with because they follow the law. It’s the non lawyer collectors who are the problem - they do all kinds of crap that is not allowed.
Really? I guess I’m too scrupulous. I make sure any debt I send to collections is airtight. The last thing I want is a deadbeat who has anything supportive of his deadbeatedness.
But isn’t that something like calling the initial business and asking “Does Bduck owe you this money…they say yes…so it is ‘confirmed’?”
I guess I should say what bothers me about this is Person A says Person B owes him $500. However, he doesn’t want to go to court. So, he just tags his credit and person B has to spend much effort/take A to court etc to get it removed. Seems backwards to me.
There’s usually more to it than that. A contract, invoice, judgment…some document reflecting the debt. The collection agency is supposed to provide you with that document.
Yup, I’ve actually had this happen to me. I knew I didn’t owe the money and that a mistake had been made somewhere along the line. So I demanded proof that I owed the money (which I knew would not be forthcoming - because I didn’t owe it). A few weeks later I got a letter saying they could not find the proof and were dropping the issue.
That’s been my experience working in payables too, Candyman - it was always my job to be in contact with vendors and work out issues with what they thought we owed and what my company was willing to pay. You say you shipped 50 widjits, but we received 25 here - I have the receiving slip. Do you have the bill of lading? I’d like to think those things would have been worked out before the debt went to a collection agency, but some people’s response to a debt is to just ignore it (not saying that’s you, Candyman). When we went back and forth over a debt, both sides were usually willing to give a little bit to resolve it.
What you are missing though is there is punishment for this behavior. If someone is trying to collect on a debt that they can not validate and refuse to drop, the fines start at $1000 and can go up from there. Yes you may have to spend some time in court, but most people would find that worth it for a couple thousand dollars.