As the economy continues to slide, collection agencies, especially in Canada, are making a special year end push to cash in on the bonanza of misfortune and layoffs. Those unfortunate enough to be in collections can expect an intense period of histrionics, name calling, insults, high pressure, lies, second mortgage refinance demands @20% so that owners can meet lucrative Christmas bonuses and mortgage kickback targets.

As the MSN article below indicates, we may have seen nothing yet as the effects of greed, debt leveraging, overleveraging and bailout capital hoarding begin to take their toll.

Things are so bad that my Chinese friends tell me they are thinking of renaming 2008 as the "Year of the collection agency."

If a rude collector happens to call you during the upcoming holiday season, don't bother demanding to speak to the manager; they'll be out shopping for a new yacht.

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A CREDIT CRATER TOO BIG TOO FILL?

By Jon Markman
November 05, 2008

Despite a weeklong surge in stocks, it's becoming increasingly clear that credit has suffered a catastrophic setback.

As the movement of money across borders comes to a grinding halt, governments can only manage the decline. Don't be surprised to see markets roll back to 1995 levels -- or lower.

It's as if a set of asteroids hit Manhattan, London and Tokyo, carving a massive hole in the architecture of finance. The initial buildings in the impact crater, Lehman Bros. (LEHMQ.N), Bear Stearns and Northern Rock, were quickly incinerated. But now the toxic rain and tsunamis that were kicked up are rolling onto the survivors in waves and cutting off their air supply.

New data from world money centers suggest the movement of money around the globe has simply ground to a halt, as institutions in the United States, Europe and Asia that are receiving taxpayer dollars from governments are socking it away to shore up their balance sheets, reserve against liabilities expected in the near future and sustain their unprofitable operations.

"Governments are not really trying to save the system anymore," said Satyajit Das, a banking expert in Sydney, Australia. "They now realize that's impossible. They are just trying to manage the decline."

How low will it go?
As a result, once the current rally interlude is over, it's not hard to see the Dow Jones Industrial Average ($US:INDU) sinking to around 4,000 -- a level it last hit in 1995, before debt started to play such a large role in corporate and personal finance......

"An agency may look you up, depending on where you told them you're getting the funds to settle your account.

They (agency) will usually do a property search on you, to source money (for you).

If they notice that you own property, you have the opportunity to take out an equity loan through your bank or another company like Maple Leaf Mortgages or Northwood Mortgages."

That seems to be the collectors answer to debt,just go get a loan to pay off another debt.The ironic thing is they do everything they can to ruin your credit rating then expect to get another loan to pay them.

Thanks for responding.

However, I mentioned Rule 16(7) and the the 3 conditions of Section 43 of the BC Small Claims Act in my Oct 22 post to Katinthehat.

I was quite certain that the major problem he was facing was in meeting condition (c) of Rule 43. Even if ARO didn't serve him with proper notice, deliberately or accidentally, I told him it still doesn't mean he would be granted a retrial because he would have to show the Court he has a credible defence to the claim.

In Ontario, and other provinces, you can make a motion to set aside a Small Claims Court default judgment if you weren't properly served. For example, see Rule 11.06 of the Ontario Small Claims Court Act.

http://www.e-laws.gov.on.ca/html/regs/english/elaws_regs_980258_e.htm

Other provinces have similar provisions as one would expect since basic principles of justice mandate it. Otherwise, plaintiffs with valid claims would find it onerous to enforce judgments. Any defendant who knew they had no valid defence would simply not show up in court and wait until the plaintiff had caught up to him, perhaps years later.

When that eventually occurred, the defendant would be secure in knowing they could invariably file a motion to have the default judgment overturned using the excuse they were never properly served. To preserve fundamental justice, the Court insists the person making the motion isn't merely wasting everyone's time with stalling tactics, but instead demonstrate the existence of a credible defence.

Thus, I'm not quite sure what is happening in this case. If he's been granted mediation, then that would imply he will get a retrial should that mediation fail.

Nevertheless, as far I can see, he still has no valid defence to the debt itself that the court will accept. Yes, the Court agrees he wasn't served properly, but in Ontario and in other provinces, that's a necessary but not sufficient condition for setting aside default judgments. The BC Small Claims Act also seems to concur as per Section 43(c) when it stipulates that the defendant would have to show why he didn't owe the money.

c) [the defendant must show] the facts that support the claim or defence.

Based on what been said so far, the only foreseeable possible defences are

1) Claim the debt was stats barred when the claim was originally filed in 2006.This would require that ARO fail to produce written evidence of any payments after the year 2000. Unfortunately, the defendant has told the Court (and anyone else who would listen) about late payments made to a 3'rd party collection agency acting for HBC/Zellers/GE Capital in 2001. Apparently, ARO had no record of these payments at the time of filing in 2006. If ARO manages to retrieve them, this defence will be nullified.

2) Show the Court that the amount of the original judgment rendered was substantially in error. This will only work if ARO didn't obtain the detailed (instead of summary) acccount statements on his debt from HBC when they bought it. But I know they almost always do. Besides, they would have had to present them to the judge to get the default judgment in the first place.

Generally, you can only file a counterclaim if you are granted a retrial, since that's when you would be allowed to file a statement of defence to the claim. At this stage, it's not clear if that is going to happen judging by the judge's recent comments. Irregardless, there's nothing to stop Katinthehat from initiating a separate action to recover damages if things don't work out.

Ray

correction - you can file the docs yourself in small claim. Supreme would require a lawyer, I'm so unfamiliar with small claims... its pretty sad.

I'd consult one regardless and strongly consider a counter claim here.

I'm more supreme court. But I will try.... You should be able to open the judgment quite easily.

They have a judgment based on the fact you didn't appear or defend the action. What you do need here is a lawyer and they will get you to put all of these details (with the proof you have) into an affidavit that gets filed with the courts showing why the judgment needs to be reopen or thrown out.

BC courts are extremely strict with creditors obtaining judgments on debtors. You will need a lawyer to do the affidavit and file it but it is the only way.

The BC court website is quite a useful resource.
http://www.ag.gov.bc.ca/courts/civil/smallclaims/

then go here
http://www.qp.gov.bc.ca/statreg/reg/C/CourtRules/CourtRules261_93/261_93_02.htm#rule7.3subrule42

I THINK your answer is here:

Cancellation of a dismissal or default order

(42) A party against whom an order is made under subrule (38) (b), (39) (b) or (41) (b) for not attending a mediation session or for not signing a fee declaration before, or at the beginning of, the mediation session may apply under Rule 16 (7) to a judge to cancel the order, and the judge may cancel the order under Rule 16 (6) (j).

[en. B.C. Reg. 251/2005, s. 3.]
What application must contain

(43) A party seeking an order under subrule (42) must attach to the application an affidavit containing the following:

(a) the reason for not attending the mediation session or for failing to sign the fee declaration;

(b) the reason for any delay, if there has been delay in filing the application;

(c) the facts that support the claim or defence.

[en. B.C. Reg. 251/2005, s. 3.]
If a judge cancels a dismissal or default order

(44) A judge who cancels a dismissal order or default order made under this rule may also do one or more of the following:

(a) order that the disputed claims proceed to mediation on any terms the judge considers appropriate;

(b) order the payment of any expenses incurred by the party or parties who did attend;

(c) order that a settlement conference or trial be held;

(d) make any other order that the judge considers appropriate in the circumstances.

I advised that you talk to someone who was more familiar with Small Claims Court procedures in BC than I am.

I notice you included some info in your last post that you left out in earlier responses. It appears the court has done what obviously should have been done; that is put you back in the position that you would have been in had you been properly served.

Had that been done, you would have been given the mandatory mediation hearing you were denied by ARO's sleight of hand and, presumably, the right to file a defence, should it fail.

On balance, the court hasn't thrown out the rights of the plaintiff. Errors in service don't negate a claim in Ontario, and as I said, they're unlikely to do so in any other province, including yours.

The BC Act doesn't explicitly describe how falsifying affidavits of service affects the validity of plaintiffs' claims. but basic principles of equity would strongly suggest it's a separate matter to be dealt with apart from the claim. If you refer back to my first response, that's what I surmized.

If ARO has an airtight case against you with all the necessary documentation from HBO, then they're not going to be very flexible during your mediation hearing. Why should they? Since you have a job they can garnish at any time AND pre/post judgment interest is building up at 32.3% per annum And since BC Small Claims Court has a limit of $25K before costs and post judgment interest, ARO can sit back and laugh.

Normally, a debt that old can often be settled out of court for 5% to 15% of it's face value - although ARO swears up and down they need 85%. Pathological liars will be pathologicla liars. However, once the get a judgment, they are in the driver's seat unless you're contemplating bankruptcy in the near future.

If this thing ever gets retried, take note: the judge isn't going to care one iota about your PIPEDA, BPCPA and credit bureau reporting rights or your embrrassment at work etc. If ARO has the proper documents supporting their claim from HBO, then the judge has no other real option than to give them the whole kit and kaboodle.The only thing the judge can do for you is give you easy monthly payment terms with no interest while not in default. The last consideration is especially important.

If it comes up for retrial, DO NOT ACT ANGRY OR ANNOY THE JUDGE OR ANYONE ELSE IN THE COURT ROOM. ACT PATIENTLY AND COURTEOUSLY AT ALL TIMES. I CAN'T OVERLY STRESS HOW IMPORTANT THIS IS IN THE EYES OF THE JUDGE. There are actually some judgments that carry post judgment interest rates of 59.9%, just below the illegal usuary rate of 60%; so whatever else happens, you don't want to get saddled with any further post judgment interest.

Another point: Normally, sufficient regular documentation will be on file accompanying the judgment ARO obtained against you in 2006. But you stated that when you went into court to examine the file, there was no evidence that you had made payments to a 3'rd part collection agency acting for HBC during 2001. All that was on file was an invoice from HBO from 2000. You didn't state anything more about it.

Nonetheless, your only realistic defence to this claim is that it's stats barred if ARO has all the requisite paperwork. AGAIN, for the last time, there is a 6 year limitation period on this type of debt as per Section 3.5 of the BC Limitations Act. If ARO filed the claim in 2006, but the last record of payment they have on the account is from sometime during 1999. then that's over the 6 year limit. The invoice date of when HBC sold the debt to ARO is absolutely irrelevant. It's 6 years from when you last made a payment on the account or provided written acknowledgment of it. If ARO can't show the Court written evidence of one of those 2 occuring after 1999, then the Court has no choice but to dismiss the action. But you must claim as a defence that the action was stats barred when ARO originally filed it in 2006 - NOT 2008. However, if you're crazy enough to keep on yacking about those late payments to the court, you'll shoot yourself in the foot.

In terms of strategy, since you've been granted mediation, you will find out what information ARO has on you then. You will force their hand by going in and claiming the action was already stats barred when they filed the action in 2006. They will have to show invoice statements from Zellers indicating a payment after the year 2000. If they have no record of those late payments to a collection agency during 2001 and if don't admit them then ARO will have nothing further to proceed on.

But if the mediation hearing ends unsuccessfully and it goes back for retrial, ARO may go back to Zellers and be able to dig up from GE Capital (HBC Finance) the collection payments made in 2001. I'm not sure how long GE may keep the data, but if they still have it and give it to ARO to present at a retrial, you're likely doomed.

I originally suggested you obtain what info ARO had on your file through PIPEDA but that was before I learned the case might go to trial again. At this stage, there would be no advantage to doing that.

Logistically, if ARO has the info about the payments made during 2001 and if both mediation and your defence fails and ARO is about to get a revised judgment order, then that's the time to bring up those late payments. In other words, only when everything else is lost.

If you should manage to escape the collection agencies' talons, you probably should arrange a greatly reduced settlement at some future date out of moral considerations and principles.

Ray

http://www.geowarehouse.ca/

An agency may look you up, depending on where you told them you're getting the funds to settle your account.

They (agency) will usually do a property search on you, to source money (for you).

If they notice that you own property, you have the opportunity to take out an equity loan through your bank or another company like Maple Leaf Mortgages or Northwood Mortgages.

Nameuser... can you look at some of my posts. Raymond has advised that I contact you also. Are you from BC?

To make a long story short, ARO served the Claim to an address I did not live at, so I knew nothing and did not show up in court. They won. They then tried to garnish my wages and served paperwork over 1 month late to my employer, but this let me know that someting was going on.
Went to the small claims court desk and found out all that has been done. They also served me again for a pyament hearing, again to the wrong address. I knew nothing about this, so a bench warrant was issued against me. I finally found about the bench warrant and went in to be escorted by police to the small claims desk. That is where I found out more into to what they have been doing. I got the proof from Canada Post that their paperwork was returned back to them showing that I never received it, but of course they never let the courts know. I went in to the payment hearing, told the judge, but she would not listen. Kept saying they have a claim. I got the judge to put it off a month so I could seek advise. This I did. I applied back to the judge with all my paperwork to show I never got served...twice, etc.... I did not have to show up for this court date, as the small claims court called me and said it has now been put off to mediation, which is in Jan. 5, 2009.
Any advise?
I am just going in claiming that I have never been served, and ARO has known about this. They have caused me alot of embarrasement at work, etc., lost time from work going to the courts, travel expenses, etc. This debit is from 2000, payments were made to a different company in 2001. HBO/Zellers has not included any payment info from this company in 2001, just has been going by a 2000 invoice date. If I have not been served leagally then they would have to start from scratch? Serve me now? Which is too late, too old?

I also would like to know how I can complain about the actions to what they have done to me? Should I take them to court after mediation for lying to the courts, serving expired documents to my employeer, creating a lot of stress and loss of wages due to all of this??????

Yes. All agencies have land title searches. If you are in ontario your property can be found by your name. It will show when you purchased it and for how much, provided they search the proper title district you own in.

Having said that, they don't search everyones name for a land title but if you are looking to settle the bank may ask if this was checked.

If it shows as your primary residence for the last few years then there is a high probability they would look into it.

Can collection agency find out if I own house in ontario or even Scotia bank?
I am in the process of settlement for my scotia student loan. I do not want either the collection agency or the bank to know that I am owning a condo.
Any help would be appreciated. Thanks.