Can a Collection Agency Take Me to Court? Will I Go to Jail for Not Paying My Debts?
What can collection agencies do? Can they take you to court? Can you go to jail because you have not paid your debts?
The simple answer is yes - it is possible for a collection agency to start a court action against you. Typically, the collection agent representing your creditor will first call you and send you numerous threatening letters.
However, they will only take you to court if they believe you have the ability to pay, and they have been unsuccessful in collecting from you without going to court.
What happens if a collection agency takes me to Court?
In case the collection agency does take you to court, the purpose of the court hearing will be to determine whether or not you owe the creditor. In most cases the fact that you do owe the money is not in dispute. You know you owe the money, and the creditor has proof that you owe it, so in most cases the court hearing is a very quick event.
The judge signs a piece of paper, called a judgment, stating that you owe the money.
The next possible step for the creditor is to apply to the court to enforce the judgment, which generally means they apply to:
- seize your bank account or other assets, or
- garnishee your wages;
In most cases there is no point in a creditor freezing your bank account, since once your bank account is frozen you will never deposit any money into that account again. In addition, most people don’t have any assets that can be confiscated. Therefore, the creditor is most likely to attempt to garnishee your wages.
If they don’t know where you work, they cannot send a garnishment notice to your employer until they determine where you work. If they know where you work, garnisheeing is possible.
Can I Go to Jail if I Don’t Pay my Debt?
You will not go to jail if you don’t pay your debt. Many people worry that if they don’t pay their debts they will go to jail, but that is not the case. Jail terms are the result of a criminal trial. Creditors are taking action in a civil trial, which as described above leads to a judgment or a garnishment order, but not jail.
To go to jail you must be convicted of a criminal offence, and you must be charged with a crime by the police. If you rob a bank, you will go to jail. If you commit fraud and are convicted, you can go to jail. Not paying your credit card is not a criminal offence.
Even though debts do not lead to jail, it is very stressful having collection agents threatening you, and having your wages garnisheed creates an obvious financial burden.
What Can I Do to Get Help?
If you are worried about creditors and collection agencies taking you to court you can contact a licensed trustee to learn more about
In many cases a consumer proposal or bankruptcy is the best option and necessary to stop garnishments and get you back on track.
Contacting a licensed trustee for a free consultation is an easy next step and will help you understand what your best options are.