When To Initiate Legal Action

Knowing when to sue does not have to be a difficult decision but often it is one of the most challenging decisions a creditor can make.  This is largely due to preconceived notions that are inaccurate; and misconceptions that result from the media and television programs that often portray the legal system as a costly and unpleasant experience.  

Although the aforementioned can be evident for certain legal matters, quite the opposite is true for debt related matters that are heard in the Civil Division of Provincial Court. In fact, the Civil Division of Provincial Court is designed for ordinary people to present their legal problems in a cost-effective forum without the need to hire a lawyer.

It is important to be aware that many parties employ the services of a lawyer or agent.  Proceeding with legal action in absence of either of the aforementioned has inherent risks.


What is the difference between collection action and legal action?
Knowing the difference between collection action and legal action is an integral part of the decision making process of knowing when to sue.  Some of the major differences can be summarized as follows:

Collection Action:

  • the debtor is not obligated to respond to a demand for payment.
  • if the debtor does not respond to a demand for payment the repercussions are very limited.
  • in absence of legal action, a collection agency has procedural limitations.
  • collection action has a limited impact on certain types of debts and/or contractual matters. 
  • collection agencies have no more authority to collect debts than any other company.
  • collection action may motivate payment, but still relies on voluntary repayment. 
  • collection information can be submitted to the credit bureau.

Click here for more general information pertaining to collection agency regulations.

Legal Action:

  • if the Defendant does not respond to the Claim, the Plaintiff may get a default judgment.
  • when the Plaintiff receives default judgment, enforcement proceedings can be taken.
  • enforcement proceedings can include garnishment of wages, receivables, bank accounts and further include seizure of non-exempt assets. 
  • when a collection agency becomes your legal "agent" they have a broader scope of procedures and options.
  • legal action has a stronger impact on certain types of collection and contractual matters.
  • legal information can be submitted to the credit bureau.

Click here for more general information regarding the legal process.




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