A debt is created when you borrow money and there are steps a lender can take to collect.

What can someone do if I owe them money and I cannot pay?

Without taking you to court a creditor (like a bank, credit card company, utility company etc.) can:

cut off services
make the whole amount of a loan due at once instead of taking scheduled payments—if your loan agreement allows this
take back the item you secured the loan with, like a car
hire a collection agency

I am thinking about getting a payday loan to pay some bills - are there rules about these loans?

Yes, there are. These are a very expensive way to borrow money because interest rates are so high, but sometimes people do not have other options. The maximum amount a lender can charge is $17 for every $100 you borrowed. It may not seem like a lot because the loan is usually only for a week or two. But the cost to borrow money another way for this short of a time, for example on a credit card, is way lower and could amount to less than a dollar.

The amount will be taken out of your account on the next payday. Lenders cannot lend you more than 50% of your take home pay. You have until the end of the business day that you took the loan out on to change your mind. You can give the lender the money back and they cannot charge you for cancelling.

What can a collection agency do?

A collection agency can only do things the creditor could do. They cannot take money out of your bank account or take anything you own unless it was used to secure a loan. Collection agencies can contact you by phone, text, in-person or email. Collection agencies must:

identify themselves when they contact you
not contact you on a Sunday or holiday, or on any other day between 9:00 p.m. and 8:00 a.m.
not contact you so often or in a way that is harassing or intimidating.
not give or threaten to give any information to your employer or the employer of a family member which could hurt your employment
not give any false or misleading information
not demand more money than what you owe the creditor

What if a creditor sues me?

You will be served with court papers that say how much they are suing for and what the debt is. The creditor can get a judgment if you do nothing. They can also get a judgment if you try to defend yourself and they can show that you do owe them money.

Once they have a judgment, they can take money out of your bank account or take money from your employer that would go to you for wages. They can also sell things you own for money to pay back the debt.

When might it be different?

There are rules that apply to creditors taking back items that are located on a reserve. They cannot go on to a reserve to seize something like a car that had been used to secure a loan. However, if you buy something conditionally—you do not own it until it is paid for in full—creditors can seize it even if it is on a reserve. You also cannot take out a mortgage on a home on a reserve.

Learn More

For more information about debts and credit visit the Debts section on plea.org or order PLEA’s publication Debts & Credit free of charge by going to plea.org.

Get Help

Consumer Credit Division
Provides information on payday loans and allows you to file a complaint about a payday lender or other lender.
Phone: 306.787.6700
Email: fid@gov.sk.ca

Provincial Mediation Board
Helps debtors and creditors reach an arrangement for payment of debt without going to court.
Phone: 306.787.5408
Email: pmb@gov.sk.ca