BC Debt Collection Laws 2026 - Wage Garnishment & Statute of Limitations

British Columbia provides strong consumer protections through its Limitation Act and active regulation by Consumer Protection BC. With a 2-year limitation period, 70% wage garnishment protection, and one of Canada’s highest costs of living, BC residents need to understand both their rights and available debt relief options.

Your Debt Collection Rights in British Columbia

Under BC’s Limitation Act, creditors have 2 years to commence legal action on most debts. The clock starts from the date of your last payment, the date you last acknowledged the debt in writing, or the date the debt first became due, whichever is latest.

BC changed its limitation period from 6 years to 2 years in 2013 for defaults occurring after June 1, 2013. This makes BC’s limitation period among the shortest in Canada, tied with Ontario, Alberta, and several other provinces. The 2-year rule applies to credit cards, personal loans, lines of credit, payday loans, medical bills, and most other unsecured consumer debts.

After 2 years without a lawsuit being filed, the debt becomes statute-barred. This means the debt still exists and you technically still owe it, collectors can still call and send letters, and the debt can still appear on your credit report for up to 6 years. However, collectors cannot sue you in court, cannot obtain wage garnishment orders, and cannot seize bank accounts or assets without a judgment.

Making any payment or acknowledging the debt in writing including by email restarts the 2-year limitation period. Even a small partial payment gives creditors another full 2 years to sue. Be extremely careful about making goodwill payments on old debts unless you intend to pay the full balance or negotiate a settlement.

The Limitation Period: When BC Debts Become Statute-Barred

The 2-year limitation period applies to most unsecured debts, but some debts have different rules under federal law or specific BC legislation:

BC’s 15-year limitation period for secured debts like mortgages is longer than most provinces. This reflects the high value of BC real estate and the need for lenders to have extended time to enforce security. Court judgments have a 10-year enforcement period and can be renewed before expiry, potentially extending collection efforts indefinitely.

If you’re sued within the limitation period and receive a Notice of Civil Claim, you have 21 days to file a Response to Civil Claim. Failing to respond leads to a default judgment against you, which then allows the creditor to garnish wages up to 30% and seize bank accounts.

Wage Garnishment Limits in British Columbia

If a creditor obtains a court judgment and applies for wage garnishment, BC’s Court Order Enforcement Act protects 70% of wages from garnishment. This matches the Canadian average and provides solid middle-ground protection compared to Ontario’s 80% and Alberta’s 50%.

The minimum protected amount is $100 per pay period if you have no dependents, or $200 per pay period if you have one or more dependents. This provides additional protection for low-income earners beyond the base 70% exemption. For family support garnishments like child support, different rules apply—up to 50% of wages can be garnished if monthly wages are $600 or less.

A worker earning $4,000 per month in BC could lose up to $1,200 to wage garnishment, compared to $800 in Ontario or $2,000 in Alberta. For most BC workers, wage garnishment creates significant financial hardship given the province’s high cost of living. Use the wage garnishment calculator to estimate your exposure and verify whether any existing garnishment exceeds legal limits.

Your Protections Against Collector Abuse in BC

British Columbia has one of Canada’s most active collection agency regulators. Consumer Protection BC licenses all collection agencies and individual collectors, investigates complaints, and enforces the Debt Collection Act and Business Practices and Consumer Protection Act.

All collection agencies must be licensed, and collectors must hold individual licenses verified through Consumer Protection BC’s online database. This two-tier licensing system provides stronger oversight than provinces that only license agencies without requiring individual collector credentials.

Contact hour restrictions are clearly defined. Collectors cannot contact you before 7 a.m. or after 9 p.m. on weekdays, before 1 p.m. or after 5 p.m. on Sundays, or on statutory holidays. You have the right to request in writing that all communication be in writing only, which collectors must honor.

Prohibited practices include using threatening, profane, or intimidating language; communicating so frequently that it causes alarm or distress; pretending to be police, lawyers, or government officials; using documents that look like court forms; misrepresenting the amount owed; and claiming they will take actions they legally cannot.

Third-party contact is strictly limited. Collectors cannot discuss your debt with family, employers, or neighbors except to obtain your contact information. They can only contact your employer to verify employment or execute a court-ordered garnishment once obtained. Disclosing your debt to third parties is a serious violation that should be reported immediately.

Penalties for violations can reach $10,000 per offense for individuals, with higher amounts for corporations. BC’s active enforcement means complaints are taken seriously and can lead to license suspensions or revocations for repeat offenders.

Ways to Get Out of Debt in BC

When debt becomes overwhelming, BC residents have access to federal debt relief programs that provide immediate protection from creditors. Consumer proposals and bankruptcy are administered by Licensed Insolvency Trustees under the Bankruptcy and Insolvency Act. Both trigger an automatic stay of proceedings that stops all collection calls, wage garnishments, and lawsuits.

BC’s high cost of living contributes to higher average debt loads despite good incomes. Many BC residents are house poor with significant home equity but limited monthly cash flow. Consumer proposals are particularly attractive because they protect home equity while providing debt relief. Unlike bankruptcy, proposals do not require surrendering assets or calculating home equity exemptions.

Other options include requesting written-only communication from collectors to reduce harassment, disputing statute-barred debts in writing to stop collection attempts, negotiating directly with creditors for reduced settlements, consolidating debts through a loan if you qualify, or working with credit counselling agencies to set up a debt management plan.

Consumer Proposals for BC Residents

Consumer proposals offer BC residents significant debt reduction while protecting home equity and other assets. You can reduce total unsecured debt by 60 to 80 percent typically, make fixed monthly payments for up to 5 years, and keep your home, vehicles, RRSPs, and all other assets.

Average consumer proposal statistics for BC show total debt around $55,000 reflecting the province’s high cost of living, proposal payments of 30 to 35 cents per dollar owed, duration of 3 to 5 years, and completion rates above 80%. Metro Vancouver accounts for a significant portion of BC’s consumer proposal filings due to the concentration of population and high housing costs.

The consumer proposal process begins with a free consultation with a Licensed Insolvency Trustee. The trustee reviews your complete financial situation including income, expenses, assets, and debts. They calculate what creditors would receive if you declared bankruptcy, and your proposal must offer more than this amount to be accepted.

BC asset exemptions in bankruptcy are relevant because they determine your proposal threshold. Home equity is not capped in BC, meaning significant equity must be paid into a proposal or bankruptcy. RRSPs are fully protected except contributions in the last 12 months. Vehicles are protected up to $12,000 in equity. Household furnishings, clothing, and tools of the trade have prescribed exemptions.

Many BC residents with substantial home equity prefer consumer proposals over bankruptcy specifically to protect their homes. In bankruptcy with significant home equity, you might need to make large payments over 21 months or sell the property. In a consumer proposal, you keep the home and negotiate an affordable monthly payment based on your cash flow.

Once you agree on proposal terms, the trustee files with the Office of the Superintendent of Bankruptcy. You immediately receive protection through the stay of proceedings. Wage garnishments stop, collection calls end, and lawsuits are stayed. This protection lasts throughout your proposal term as long as you make your payments.

Creditors have 45 days to vote on your proposal. If creditors holding the majority of the dollar value vote to accept, the proposal binds all unsecured creditors. You make your monthly payments for the agreed term. Once you complete all payments, you receive a Certificate of Full Performance and your remaining unsecured debt is legally eliminated.

Use the consumer proposal calculator to estimate what you might pay based on your income, assets, and total debt. Consumer proposals result in an R7 rating on your credit report for 3 years after completion or 6 years from filing, whichever comes first.

When Bankruptcy Applies in BC

Bankruptcy provides immediate debt relief for BC residents with little income or assets. First-time bankruptcy typically lasts 9 months if you have no surplus income, or 21 months if you do. While bankruptcy has a more severe credit impact than a consumer proposal, it eliminates most unsecured debts quickly for people who qualify.

In bankruptcy, a Licensed Insolvency Trustee takes control of your non-exempt assets and distributes proceeds to creditors. BC bankruptcy exemptions protect necessary household items, clothing, one vehicle up to $12,000 equity, RRSPs except recent contributions, and tools of the trade up to prescribed values. Home equity is not capped, which can be problematic for BC homeowners given the province’s high property values.

Most unsecured debts are eliminated including credit cards, personal loans, lines of credit, payday loans, tax debt, and medical bills. Student loans are only discharged if you’ve been out of school for at least 7 years. Secured debts, support payments, and court fines are not eliminated in bankruptcy.

Bankruptcy results in an R9 rating on your credit report which remains for 6 years after discharge for first-time bankruptcy. This is more severe than the R7 rating from a consumer proposal. Many BC residents prefer proposals when they have home equity or stable income, using the debt relief comparison tool to determine which option makes financial sense.

How Does Cost of Living Affect Debt in BC?

BC has the second-highest cost of living in Canada after Ontario. Housing costs in Metro Vancouver and Victoria are among the highest in North America. This creates a situation where many residents have good incomes but struggle with debt due to the high cost of basic necessities.

Many BC residents are house poor—they own valuable homes with significant equity but have limited monthly cash flow after paying the mortgage, property taxes, utilities, and other expenses. When job loss, illness, or other financial shocks occur, these households can quickly accumulate credit card debt, lines of credit, and personal loans to bridge the gap.

This economic reality makes consumer proposals particularly attractive in BC. Proposals allow residents to keep their homes while reducing unsecured debt to an affordable level. Rather than selling a home in bankruptcy and potentially realizing capital gains or losing accumulated equity, a consumer proposal provides a path to debt relief while preserving housing stability.

Higher average debt loads in BC also mean proposal amounts tend to be larger than in provinces with lower costs of living. However, BC trustees are experienced in structuring proposals that account for high housing costs while providing creditors with reasonable returns and giving debtors affordable monthly payments.

Licensed Insolvency Trustees in BC

Licensed Insolvency Trustees are federally regulated professionals who administer consumer proposals and bankruptcies throughout British Columbia. In Vancouver and Metro Vancouver, numerous trustees serve the region’s large population. Trustees also practice in Victoria, Surrey, Burnaby, Richmond, Kelowna, Kamloops, Prince George, Nanaimo, and other communities across the province.

Most BC trustees offer free initial consultations by phone, video, or in person. This accessibility is important for residents in remote areas of the province who may not have local trustee offices but can access services via video conferencing. During the consultation, the trustee reviews your financial situation and explains what you would pay in a consumer proposal versus bankruptcy.

Look for trustees with good reputations, clear explanations, and experience with situations similar to yours. Many BC trustees specialize in high-cost-of-living scenarios and understand how to structure proposals that protect home equity while providing affordable monthly payments. Ask about their experience with BC’s asset exemptions and how home equity affects your options.

Use the Office of the Superintendent of Bankruptcy directory to find a Licensed Insolvency Trustee near you. Most trustees display their completion rates and client reviews online, helping you make an informed choice about who will administer your proposal or bankruptcy.

Filing a Complaint Against a Collector in BC

If a collection agency violates BC’s rules, file a complaint with Consumer Protection BC. Document all interactions including dates, times, names of collectors, and the content of communications. Save voicemails, letters, emails, and text messages as evidence.

Common violations worth reporting include calling outside permitted hours, using threatening or abusive language, misrepresenting their authority or the consequences of non-payment, discussing your debt with third parties, continuing to call after you’ve requested written-only communication, and charging excessive or undisclosed fees.

File a complaint online at consumerprotectionbc.ca/file-a-complaint or call 1-888-564-9963. Consumer Protection BC investigates complaints and has authority to impose fines, suspend licenses, and revoke licenses for serious or repeated violations. While filing a complaint doesn’t eliminate the debt, it holds agencies accountable and supports strong enforcement that protects all BC consumers.

Next Steps for BC Residents: How to Get Debt Help

BC’s combination of strong consumer protections and high cost of living means residents have both rights and challenges when dealing with debt. Consumer Protection BC actively regulates collectors, and consumer proposals offer a path to debt relief while protecting your home in one of Canada’s most expensive housing markets.

Calculate your potential consumer proposal payment to see what you might pay monthly. Check whether your wage garnishment exceeds legal limits using the wage garnishment calculator. Learn about the statute of limitations on debt in Canada including BC’s 2-year limitation period. Review how to stop wage garnishment if you’re facing a 30% deduction. Compare all debt relief options using the comparison tool to find the best path forward.

BC’s strong regulatory environment and access to federal debt relief programs give you multiple tools to resolve debt legally while protecting your assets and rebuilding your financial future in one of Canada’s most expensive but desirable regions.