Fraud is intentional deception. Fraud is a crime. Some types of fraud are referred to as scams or schemes.   Fraud affects all age groups.  Fraud usually causes financial loss for the victim.  The internet has created new opportunities for fraudsters.

The person who is deceived is generally called the victim or mark. The person who does the deceiving is generally called a fraudster, a scam artist, a perpetrator, or a thief.

Fraud can be very profitable for criminals. Fraudsters are hard to catch because they are skilled at what they do, may manage to disappear before being caught, and they may not even be located in Canada.

Victims are often too embarrassed to tell anyone, and so many frauds do not get reported.

Consumer fraud is intentionally deceiving a person who buys a product or a service.  For example, you are deceived into paying money for something that does not exist, is not accurately described, or is of little or no value.  Another example is being deceived into providing information that allows a fraudster to steal from you. 

Consumer fraud happens when a person, a group, or a company takes advantage of individuals, usually for monetary gain.

Fraudsters approach their victims in many different ways:

• coming door to door
• calling on the telephone
• sending mail through the postal system
• sending emails, using social media, or other online services
• meeting in a coffee shop, club, place of worship or other place.

They may attract you with a TV commercial, a magazine article, a newspaper advertisement, a website, a survey, or through social media.

A fraudster can cause you financial loss without having to make any personal contact with you. They are always thinking of new and different scams to take advantage of people.

Unfortunately there are so many types of scams they cannot all be listed here, and it is also difficult to guess what the next new scam will be. Examples of some of the more common consumer fraud scams include:

Identity Theft: The fraudster uses your personal and financial information to steal from you. This is the top fraud across North America.

Advance Fee Fraud: You are asked to make a payment or to give your personal or financial information before you receive a product or service.

ATM, Credit Card, and Debit Card Fraud: The fraudster uses your pass codes and card numbers to withdraw cash from your accounts or to pay for purchases with your credit.

Counterfeiting: The fraudster pays for purchases with fake money, cheques, or money orders.

Door to door frauds: The fraudster comes to your door and says “I was driving by and noticed that your roof needs repair.” Or “I have some left- over materials I can sell you at cost.” Or “I’ll need a 50% down payment to purchase materials.” Always check with the Better Business Bureau or a neighbour who has used them before hiring any person to do work on or in your home.

Emergency: The fraudster pretends to be someone close to you and tells you they need money right away due to a fake emergency, such as being arrested and needing bail money, being in a car crash, or having trouble travelling back to Canada.  Grandparents are particularly vulnerable to this type of fraud, as the scammer may pretend to be a grandchild who claims to urgently need money.

False Charities: The fraudster pretends to be a charity (sometimes by using a similar name, thanking you for your past support, or by trying to take advantage of a disaster such as an earthquake or flood). Sometimes the fraudster will go door to door pretending to collect donations for a charity.

Impersonation: The fraudster pretends to be someone or something else for personal gain; for example, someone pretends to be a grandchild or other loved one who needs money.

Investment Fraud: The fraudster misleads you into giving money for business ventures that promise unrealistic profits.  See the Investment Fraud section of our Investor Rights and Protection Guide for more information.

Misleading Job Opportunities: The fraudster promises a large income for easy work, a fee or a start-up investment, or an almost guaranteed job after an expensive course.

Online Auctions, Lotteries, and Contests: The fraudster tricks you into purchasing items of little or no value, or into buying tickets or prizes that do not exist or have little value.

Contact the Canadian Anti-Fraud Centre and Consumer Affairs Canada for more information about current scams, including COVID-19 scams 

If it sounds too good to be true, it usually is. Here are some things you can look for that will sometimes point to a scam:

• contact from strangers looking to offer you a deal
• over-excited callers using a lot of pressure
• people pushing you for immediate answers or confirmation of a deal
• people who insist that you not tell anyone else about the deal
• people who discourage you from getting any advice or advice only from a person they suggest
• any deal in which what you earn will be based on how many people you involve in the deal
• people who will not send you any information until you give them money or information
• any deal where must pay a fee or buy something before you receive a prize, credit, or product that you did not order
• prices so low they are unreasonable compared to their true value
• any reward, prize, or payment (usually very large) you are promised in exchange for your banking information
• contact from people, businesses, or creditors that you do not know
• people claiming to represent a charity that you do not know or that has a name very close to a charity that is well-known
• companies that try to sound like a well-known agency or company
• people contacting you for your credit card, calling card, banking information, or social insurance number
• any claim that you have won a prize for a contest you have not entered
• people saying they are calling from your bank and asking you to provide information about your account to help them catch a fraudster

Identity theft is getting your personal information and using it to steal from you.  Identity theft is now the fastest-growing fraud. 

Personal information might include your address, date of birth, social insurance number (SIN), credit card or bank card numbers, personal identification numbers (PINS) and pass codes, and driver's license numbers.  If identity thieves get your personal information, they may:

• take money out of your bank accounts
• charge purchases to your credit cards
• apply for new credit cards or loans in your name
• buy expensive items on credit in your name.

In extreme cases, identity thieves not only collect personal information about you, but they may also watch you. They learn about your friends and family members, and learn your personal weekly routine.  Then they decide how best to take advantage of you.  Sometimes they pretend to be stranded family members who urgently need money.  Sometimes they pretend to be you and arrange to mortgage or sell your house.

Here are some of the ways identity thieves can get your personal information. They may:

• steal it from your wallet or purse, home, mailbox, workplace, vehicle, or computer
• go phishing, which means sending you an email threatening serious consequences if you don’t update information on a website at once. This gets you to go to the website so that they can get personal information such as passwords and access codes from you.
• pretend to be someone entitled to request information (such as a government official, bank employee, landlord, creditor, or employer)
• collect it from your garbage. For example, bank and credit card statements, copies of credit or loan applications, financial statements, and tax returns.
• redirect your mail, open it, and then put it in your mailbox
• rig automated teller machines (ATMs) and debit machines so your debit or credit card number and PIN can be read
• shoulder surf — hang around your shoulder to watch as you punch your access codes and passwords into ATMs, debit machines, telephones, and computers
• buy or trade customer mailing lists
• search obituaries, phone books, directories, and other public records
• place false advertisements for jobs to obtain your résumé and contact information
• pretend your personal details are needed to claim a prize or lottery winnings
• use letterhead that looks like it comes from a government department or financial institution to get personal information from you

 

The best way to protect yourself from fraud is to be informed and alert.

• Protect your personal financial information. Do not give any of your banking or credit card information to anyone you do not know and trust. Do not write down your PIN.
• Cover the keypad or keyboard when you are entering your passwords and passcodes, and look around you to make sure that no one is looking over your shoulder.
• Check before making purchases when you are not dealing face to face with someone you know, ask for a name and contact information, and make sure the person is who they claim to be.
• Get at least two written quotes for all repair work; ask for references and check them; check for complaints at the Better Business Bureau; and don’t agree to pay all the money up front.
• Be aware that police and financial institutions never call or email you to ask for your bank card information, credit card details, or banking details.
• Do not provide more personal information than is necessary for your business.
• Only give your SIN when absolutely necessary, and do not carry your SIN card with you. Businesses such as stores should not be asking for your SIN number.
• Do not give your address and phone number unless there is a good reason.
• Carry only the documents and cards you need.
• Do not leave your purse or wallet unattended.
• If you are paying by debit or credit card, make sure that your card number does not appear on the receipt.
• If you are paying with a debit or credit card in a restaurant, keep your card in sight. Arrange to pay at your table or go with the server to process the card.
• Shred receipts and copies of papers you no longer need such as bank statements, tax returns, credit applications and statements, receipts, insurance forms, and credit offers you get in the mail.
• Do not leave personal information sitting around at home, in your vehicle, at your workplace, or on your computer.
• Keep important documents such as your birth certificate, tax returns, and social insurance card in a secure place.
• When you receive renewal documents and cards, destroy the old ones and sign the new ones right away.
• Know when your credit card and financial statements and utility bills are supposed to arrive in the mail.
• Keep credit card, debit card, and ATM transaction records so you can match them to your statements.
• Check your bank and credit card statements carefully to make sure that there are no withdrawals or charges that you were not expecting.
• Update your credit cards to ones that have the latest security features, for example, “chip cards” which require a PIN because they are embedded with a micro-computer chip.
• Let your credit card company know when you are leaving the country. Your credit card company should contact you if there is unusual activity on your card such as stays at international hotels.
• Lock your mailbox.
• Pick up your mail promptly.
• Do not pick pass numbers (for your credit card, bank account, etc.) that refer to your personal information (like your birth date or SIN).
• Do not pick passwords that can be easily be guessed such as the name of your pet.
• Use spyware filters, email filters, and firewall software on your computers.
• If you use secure internet sites for financial transactions, follow security instructions when you enter and leave the site. Under the “Tools” section in your web browser, click “Clear Recent History” when you are done.
• Be sure all personal information is deleted before you sell, recycle, or discard your computer. You may have deleted files, but the information may still be on the hard drive.
• Consider signing up with the National Do Not Call List, which prohibits most businesses that you don’t deal with from contacting you by phone.

If you suspect that you are the target of fraud, do not deal directly with the person you think is trying to deceive you.  Do not agree to provide further money to get your first payments back or to keep a deal open.

You can contact your local police or RCMP detachment and the Canadian Anti-Fraud Centre. You may also report the crime online through some of the websites listed at the end of this section under "More Information".

You should also contact Equifax Canada and TransUnion Canada. They are credit reporting agencies. They can place an alert on your account so creditors must call you before opening any new accounts or changing your existing accounts. Also, ask them to send you a copy of your credit report so you can see if an identity thief has opened any new accounts or debts in your name.  The Financial Consumer Agency of Canada has information about credit reports, and credit reporting agencies.

If you have been the victim of fraud, you must contact the financial institutions and credit card companies where you have your accounts. Tell them what happened and have them freeze your accounts. If the fraud has affected your account, it must be closed. You will need to open new accounts.

You should contact the police or RCMP to report that you have been the victim of fraud, no matter how small your loss may be. They may start an investigation.

You should also contact Equifax Canada and TransUnion Canada. These credit reporting agencies can place an alert on your account so creditors must call you before opening any new accounts or changing your existing accounts.  The Financial Consumer Agency of Canada has information about credit reports, and credit reporting agencies.

Report the fraud to the Canadian Anti-Fraud Centre.

If your government-issued documents were lost or stolen, contact the department, explain what happened, and ask for new documents. You will likely need to do that in writing.  Contact Service Canada at 1-800-206-7218 if your social insurance number (SIN) has been stolen.

If you think your mail is being stolen or redirected, contact Canada Post at 1-800-267-1177 or canadapost.ca.

• Know the source. This means checking into a website before handing over any personal information — especially personal financial information. This doesn’t mean you can’t shop or surf at unknown sites, but make sure you’ve done your homework before exchanging information.
• Read your email carefully. Many fraudulent offers come in the form of e-mails because the Internet makes it possible to send thousands at a relatively low cost. Use a mail program that allows you to screen out these mass mailings, and you’ll spend less time with your finger on the delete key.
• Deal only with reputable organizations, and don’t give out personal or financial information unless you are sure you’re in a secure environment. Don’t judge reliability by how nice or sophisticated the website may seem.
• Be careful at auction sites, one of the areas that generate a lot of complaints.
• Understand as much as possible about how the auction works, what your obligations are as a buyer, and what are the seller’s obligations.
• Find out what the website/company does if a problem happens and consider insuring the transaction and the shipment.
• Learn as much as possible about the seller, especially if the only information you have is an e-mail address. If it is a business, check the Better Business Bureau where it is located. Examine the feedback on the seller. Remember because of the difference in laws, it may be much harder to solve a problem if the seller is located outside Canada .
• Find out if shipping and delivery are included in the auction price or are additional costs. If they are extra, find out exactly how much you’ll be charged.
• Don’t give out your social insurance number or driver’s license number.
• Don’t give out your credit card number(s) online unless the site is secure and reputable. Sometimes a tiny padlock appears on the screen. This symbolizes a higher level of security to transmit data. While not a guarantee, it may might provide you with some assurance.
• Don’t invest in anything you are not absolutely sure about. Do your homework on the investment to make sure that it is legitimate.
• Be sceptical of individuals representing themselves as Nigerian or foreign government officials asking for your help in placing large sums of money in overseas bank accounts.

For more information, including ways to protect yourself from fraud:

• Contact the Canadian Anti-Fraud Centre (CAFC) online, or call 1-888-495-8501.  The Canadian Anti-Fraud Centre (CAFC) is the central agency in Canada that collects information and criminal intelligence on issues like  mass marketing fraud (e.g., telemarketing), advance fee fraud (e.g., West African letters), Internet fraud and identification theft complaints
  
  
• COVID-19 Fraud information from the Government of Canada and the Canadian Anti-Fraud Centre
  
  

• Legal Information Society of Nova Scotia Investor Rights and Protection Guide: legalinfo.org/guides/investor-rights-and-protection-guide/ 

• Financial Consumer Agency of Canada: Information about identity theft, types of fraud, counterfeit money and other threats or scams; protecting yourself from fraud; reporting fraud
  
  

• Report suspicious or unsolicited emails (e.g. phishing, malware, deceptive marketing, etc.) to the Spam Reporting Centre

• Get Cyber Safe : Federal government site all about staying safe online, for individuals and businesses: getcybersafe.gc.ca
  
  
• Contact Service Canada at 1-800-206-7218 if your social insurance number (SIN) has been stolen
  
  
• Little Black Book of Scams:  easy to use reference guide filled with information Canadians can use to protect themselves against a variety of common scams from Consumer Affairs Canada.  Consumers and businesses can consult The Little Black Book of Scams to avoid falling victim to social media and mobile phone scams, fake charities and lotteries, dating and romance scams, and many other schemes used to defraud Canadians of their money and personal information
  
  

• Competition Bureau of Canada: An independent, federal government agency concerned about competitive markets and consumer information. It investigates complaints and enquiries from the public about consumer issues such as deceptive product labelling and price fixing. Website: competitionbureau.gc.ca

• Royal Canadian Mounted Police, Scams and Frauds page: rcmp-grc.gc.ca

• National Do Not Call List (Canadian Radio-Television and Telecommunications Commission): If you have complaints about a telemarketer, or wish to register a number on the Do Not Call List. Website: lnnte-dncl.gc.ca
  
  
• Service Nova Scotia consumer information from Nova Scotia government
  
  
• Better Business Bureau of the Atlantic Provinces: Tips for consumers; Check out a business or a charity; File a complaint; Information for businesses.

 

If you miss a loan or minimum monthly credit card payment, these things could happen to you:

• You could pay a higher rate of interest or more interest. 
• A creditor could demand full repayment immediately instead of smaller payments over time.
• A collection agency could try to collect your debt.
• Your credit rating will drop, and it could cost you more to borrow money in the future. 
• You may face legal action and have your wages garnished and/or assets seized.
• You could have difficulty getting credit in the future.

If you guarantee a loan with something you own (assets), like money or goods of value, those are called “security” or “collateral.” Creditors who have a security interest are called “secured” creditors. 

A secured creditor can take assets you have used for security if you do not make payments on your loan. This may include money or goods you promise to give the creditor if you do not pay the debt.

A common type of security is property, such as your home or vehicle. For example, if you do not pay your mortgage, the lender can get a court’s permission to foreclose on your home. If you miss a vehicle loan payment (default), the creditor may be able to repossess your car without suing first. 

If you have trouble paying your debts, talk with a trustee about bankruptcy or a consumer proposal. Only a trustee can administer or file a bankruptcy or a consumer proposal. Do not be misled by other people’s claims they offer bankruptcy or consumer proposal services. Talk to a trustee before choosing an option. They are authorized to file the required documents.

Trustees will review your financial situation and provide advice on:

• Bankruptcy
• Consumer proposals 
• Consolidation loans
• Credit counselling
• Division 1 proposal  — another formal way to offer to settle your debts with creditors
• Refinancing

Trustees can help make your options clear.

Watch Discussing your options with a Licensed Insolvency Trustee.

Bankruptcy is a legal process that frees, or “discharges," you from debts. This does not include spousal support, child support, court fines, or other forms of exempt debt. It also releases you from most debts owed to the Canada Revenue Agency (CRA), such as income tax debt. 

You do not need to see a lawyer to file bankruptcy, but you need to connect with a trustee.

The Bankruptcy and Insolvency Act is a federal law on bankruptcy procedures and rules. Trustees administer the law, and the Federal Office of the Superintendent of Bankruptcy Canada regulates it.

Where do I start? 

The first step to take when thinking about bankruptcy is to contact a trustee. They will review your financial situation and explain your options. Most trustees offer a free initial consultation. 

Only a Licensed Insolvency Trustee can administer a bankruptcy or a consumer proposal.

To file for bankruptcy, you must:

• Be released, or “discharged,” from any previous bankruptcy;
• Owe at least $1,000 in unsecured debt;
• Live, do business or have outstanding business debts, or have property (personal or real) in Canada; and
• Be unable to make regular payments on your debts as they become due, or the value of all your assets must be less than your total debts.

If you have never been bankrupt before, you will likely be in bankruptcy for either 9 months or 21 months, depending on the number of people who live in your household and your household income. 

If you have filed for bankruptcy before, the process can be longer. The record of your bankruptcy will also stay on your credit report for a longer period of time. It’s best to speak with a trustee to understand how this applies to you. 

When you go bankrupt, the creditor must stop contacting you about payments and take legal action to collect debts. This is called a stay of proceedings”.

Watch 'What to expect if you file for bankruptcy' from the Office of the Superintendent of Bankruptcy Canada.

If you have never been bankrupt, you will likely be in bankruptcy for either nine months or 21 months, depending on the number of people in your household.  If this is your first bankruptcy, it will stay on your Nova Scotia credit report for six years.  

If you have filed for bankruptcy before, the process will be longer. You can expect to be in bankruptcy for either 24 or 36 months. The bankruptcy record will stay on your credit report for 14 years. 

A consumer proposal is a new legal contract between you and lenders who did not take security or collateral, known as “unsecured creditors.” A consumer proposal replaces your original agreement with these lenders. It sets out a debt settlement plan for no more than five years.

You are eligible to make a consumer proposal to your creditors if your debts are less than $250,000. This does not include debts secured using your family home. If your debts are more than $250,000, a trustee may discuss filing a commercial proposal or bankruptcy.  

Like a bankruptcy, a consumer proposal does not affect the rights of secured creditors.  An example of a secured creditor is a bank that has given you a loan secured on your home. That means if you do not continue making payments to the secured creditor,  that creditor will take possession of and sell that asset.  

You must go to two budget counselling sessions with the Trustee during the administration of a consumer proposal.  

When you have finished all the payments under the proposal, the Trustee will give you a Certificate of Full Completion, which means that your debts have been fully satisfied and that you are no longer legally responsible for the debts.

Watch 'Submitting a consumer proposal to your creditors’ from the Office of the Superintendent of Bankruptcy Canada.

During the course of the bankruptcy, you must go to two budget counselling sessions.  The Trustee must also file an income tax return for the year bankruptcy happens.  You must give the Trustee your income tax information so the Trustee can file your return in that year.  

If you fail to do any of the things you are required to do during the bankruptcy, the Bankruptcy Court may extend your bankruptcy until you do what is required.

At the first meeting, the trustee will review your assets (items owned) and determine which ones are:

• exempt — protected by law and cannot be used to pay debts;
• secured (financed) —that you are making payments on
• available to sell — may be used to pay your bankruptcy debts.  

Exempt assets include:

• Personal belongings such as clothing, food, and fuel;
• Household furnishings;
• Medical aids;
• Work tools you own, up to $7,500 worth;
• Vehicle worth no more than $6,500;
• Most life insurance policies;
• Pensions;
• RRSPs, except for contributions.

 A Registered Education Savings Plan (RESP) is not exempt in Nova Scotia. However, creditors can only access the RESP portion you would get if cashed early, before its maturity date. This usually does not include any government grants, bonds, or the income that has been earned on the RESP. 

Secured (financed) Assets

You may be able to keep some or all of your secured assets. It is complex, so you should speak with the Trustee about your particular situation.  

Bankruptcy does not usually affect an asset that is financed, such as vehicles or campers. The general rule is that if you wish to keep the asset, you must keep making the payments, or the secured creditor will seize it.  

The rules are a bit different for assets that increase (appreciate) in value (equity), such as real estate (a house or land). The trustee will determine if there is any equity in the asset. They will discuss how to deal with equity during bankruptcy if your goal is to keep the asset (like your house). Generally, this involves you making payments to the trustee during the bankruptcy for any equity so you can keep the asset. However, each situation is unique, so it is best to have a conversation with your Trustee to ensure that this is the right choice for you.

Other Assets

Trustees will discuss assets like investments, potential lawsuit settlements, inheritances, and items you own or have an interest in. You must also tell them about any assets you get during the bankruptcy, as these may also become available to your creditors. Your trustee can deal with your assets in Nova Scotia as well as elsewhere in Canada.

While bankruptcy or a consumer proposal provides much-needed debt relief and a fresh start, there are consequences you may not expect. These could include: 

• A creditor still has the right to pursue a joint debtor, co-guarantor or co-signor. Either process only affects your responsibility and not the person who agreed to debt responsibility.
• A decrease in your credit score makes it more difficult to get credit at reasonable interest rates until the situation improves.
• Having to report your finances to the trustee regularly. Based on these, they may make decisions you hadn’t considered, such as selling a vehicle.
• Affecting your ability to keep or get a security clearance for a job.
• A bankruptcy or a consumer proposal may affect your ability to deal with trust accounts.
• Bankruptcy may affect your ability to sponsor family members to come to Canada.
• If your bankruptcy includes a student loan, you may not be able to get another student loan until at least three years after your discharge from your bankruptcy or completion of your consumer proposal.
• An insurance company may refuse your life insurance.
• Possible increased charges for automobile insurance. 
• If you are a director of a corporation, you must resign if you file for bankruptcy.

 Please consult with your Trustee if you need clarification or additional information. 

Real estate

Most real estate (land, homes, buildings) is mortgaged and may have limited value or equity. As real estate usually gains value (appreciates) over time, it can be worth more than the mortgage. This is called “Equity”.  The Equity will be calculated by the Trustee. The usual practice is to “buy back” the equity in your real estate if you wish to keep it. You should speak with your Trustee for more information on how this could apply to your situation.

Some people do not want to keep their house or land. Depending on the value, a trustee may offer the property for sale or give it to the bank for foreclosure (sale at public auction). 

As each situation is unique, it's important to speak with your Trustee about your particular situation for clarification. 

Vehicles

Most vehicles go down in value (depreciate) over time. If you have a loan for your car and keep up with your car payments, that debt is not part of the bankruptcy.  You must keep taking your normal car payments during the bankruptcy. 

If you own a vehicle outright (“free and clear”), the trustee will determine its value or ask you to get it appraised. Then, it’s decided if the vehicle is exempt from your creditors. This would mean the vehicle is protected in bankruptcy or a consumer proposal.

Tell your Trustee if you no longer want to keep the vehicle. The Trustee can let the secured creditor know it can be seized and sold. If there is still money owing on the loan after the car is sold, that becomes an unsecured debt and is included in your bankruptcy.

Although most people who go to a Trustee already have a lower-than-average credit score, a bankruptcy or a consumer proposal will mean a further decrease.  

If you have only filed one bankruptcy, the bankruptcy will stay on your credit report for 6 years in Nova Scotia.  

If you declare bankruptcy more than once, the bankruptcy will stay on your credit report for 14 years.

A consumer proposal will generally stay on your credit report for 3 years, even if you have filed more than one consumer proposal or have a bankruptcy in the past.  For this reason, some people choose to file a consumer proposal rather than bankruptcy more than once.    

During the budget counselling sessions with the Trustee, the Trustee will explain how to rebuild your credit rating, how to use credit wisely and how to manage your money. Your credit rating should improve after bankruptcy if you demonstrate creditworthiness, including a track record of income.  

The Financial Consumer Agency of Canada has information about credit reports and scores, including how long information stays on your credit report, as do the two credit reporting agencies in Canada, TransUnion and Equifax. 

If your partner does not guarantee or co-sign any of your debts, they will not be affected. This is because a bankruptcy or a consumer proposal only affects your legal responsibility for a debt. Guarantors and co-signors are still responsible for the debt unless they themselves file a bankruptcy or a consumer proposal. This means if your partner is also legally responsible for payments to the debt, their credit will be affected if they do not continue making payments. 

[accordion-bankruptcy title="Is my partner responsible for my debts?"}

Generally, if a partner did not sign to accept responsibility for a debt (co-sign), they are not responsible for the debt to the creditor. Your partner is only responsible for your debts if they own them jointly.  For example, a joint bank account in overdraft, a joint loan, a joint credit card or a credit card where all cardholders are responsible for the debt, regardless of who incurred the charges.

It can be difficult to know who else is responsible for your debt, such as when two people use the same credit card account. If it is unclear, or you are having difficulty determining which card is responsible for which charges, contact the credit card issuer for clarification. 

Many people are surprised that you can apply for and get credit when you are in bankruptcy.  Most Trustees will recommend that you not get credit during a bankruptcy, but no law says that you cannot.   The only condition is that you must tell the creditor you are bankrupt. 

Yes. Bankruptcy does not affect your passport. You will still be able to travel abroad.

The federal law Bankruptcy and Insolvency Act sets out trustee fees for services, such as budget counselling and filing government or court documents.

Your initial consultation with a trustee is usually free.

During your bankruptcy, the Canada Revenue Agency (CRA) sends any GST rebate cheques and/or income tax refunds to the Trustee.  While the CRA will send the GST rebate to the Trustee during the entire period of your bankruptcy, only the potential refund during the year in which you file a bankruptcy is forwarded to the Trustee by the CRA. 

You will also have to make monthly payments to the Trustee.  The amount of these monthly payments depends on your level of income. Your monthly income payments are either based on income standards (See Surplus Income Payments - monthly payments to the Trustee) or are a minimum fee that a Trustee will charge to cover the bankruptcy costs.

Lastly, a Trustee will look at the value of your available assets.

If you have spoken to at least two separate trustees and cannot afford the minimum fees, contact the Office of the Superintendent of Bankruptcy ( 1-877-376-9902) about the Bankruptcy Assistance Program. They may help you find a trustee who will accept minimum fee payments over a longer time.

You may be eligible for the Bankruptcy Assistance Program if all of the following are true:

• Have contacted two licensed insolvency trustees and are unable to work out a payment plan; 
• Have not recently been involved in commercial activities, like running a business or selling products;
• Do not need to make surplus income payments;
• Do not have assets that need selling or can be sold;
• Are not in jail. 

Having initial consultation meetings with Trustees is recommended in this situation. Trustees usually offer a free initial consultation. At that time, you and the Trustee will review your finances and discuss your options. The Trustee will let you know if you will need surplus income payments or have assets that they would need to sell.  Whether you need to make surplus income payments depends on the size of your family and your income. Only a Trustee can tell you if you need to make surplus income payments, so it is critical to speak with them. 

A bankruptcy or consumer proposal can stop:

• A garnishment of your wages, including by CRA.
• Enforcement of a creditor’s judgment. The exception is a properly registered judgment where the CRA is the creditor. This secured debt cannot be released by bankruptcy or a consumer proposal.  
• Any lawsuits against you by your creditors.

Bankruptcy or a consumer proposal will not stop a foreclosure. However, you will be protected if the secured creditor does not get all their money once your property is sold. This is commonly called a mortgage deficiency. It becomes an unsecured debt in the bankruptcy or consumer proposal. 

There are strict rules about foreclosure and the effects of bankruptcy, so it's important to speak with your trustee about your particular situation.

Seven-year rule

You will be eligible to be released from your obligation to repay your government student loans if you file for bankruptcy seven or more years after the date you are no longer a part-time or full-time student.  If it has been less than seven years since your PSED, and you do not qualify for a repayment assistance program with the National Student Loan Centre, you will still be required to make student loan payments.  

Before filing a bankruptcy or a consumer proposal, you should contact the National Student Loans Centre to confirm your period study end date and whether you qualify for repayment assistance programs. 

Hardship - 5-year rule

If your student loan is most of your debt, then a bankruptcy or consumer proposal may not give you the debt relief that you need. 

If you still have difficulty making payments on the student loan after bankruptcy or a consumer proposal, you may apply to the Bankruptcy Court to ask to have the student loan released when five years have passed since your PSED.  This is called the hardship exception to the seven-year rule.

If you apply to the Bankruptcy Court to release the student loan any time after five years, you will have to prove that:

• You have difficulties, and will have ongoing difficulties, making the payments on the student loan (called financial hardship);
• You have acted in good faith with your repayment obligations. To determine this, the court will look at:
  • how you used student loan money
  • commitment to finishing school
  • efforts to repay the loans
  • whether you used available repayment assistance programs, like the National Student Loan Centres.

The bankruptcy court has a package explaining the hardship application process requesting the student loan released.  Contact the Bankruptcy Court at (902) 424-6908.

You can get more information about student loans and bankruptcy from a Licensed Insolvency Trustee and the Office of the Superintendent of Bankruptcy Canada. 

Surplus income is the amount of money your household makes that is more than the government’s income table, called “Standards” - the amount the government says a family with your income and number of dependents should need to live. The Trustee must follow the Standards to calculate how much your monthly surplus income is above the Standard for your household size. If you file for bankruptcy and your family income is above the Standards, you will need to make surplus income payments. 

The Trustee calculates the monthly payments at the beginning of the bankruptcy. Your entire family’s income is used to calculate your surplus income. This includes your spouse’s or partner’s income, as well as any other adult who is contributing towards household expenses. Funds above this are called “surplus income” and must be paid monthly to the trustee. 

Your Trustee then uses that money to repay your creditors. 

If your household income is below the Standard, the Trustee will charge you a minimum monthly fee to cover their fees. You will most likely be in bankruptcy for a shorter time than if you are above the Standard.

How much money you can keep depends on how many people live in your family and in your home. The trustee will also ask if you have certain expenses that would lower the required monthly payments. Examples include child support, spousal support, and medical expenses.

During bankruptcy, you must submit monthly income and expense reports to the Trustee so they can ensure you are making the right monthly payments based on the Standard. It also makes you more aware of how you spend money! 

The amount of your surplus income payment can change if your income changes. Therefore, it is very important to file these monthly reports on time.

Watch Bankruptcy and surplus income payments from the Office of the Superintendent of Bankruptcy Canada.

A discharge from bankruptcy means you are released from your legal responsibility to repay your debts. A discharge commonly means the end of your bankruptcy. However, some debts are not discharged. (See Debts that are not discharged in a Bankruptcy or Consumer Proposal)

Most people get an Automatic Discharge from their debts without a court hearing. Other times, the Bankruptcy Court has to decide on your discharge status. The most common situations where the court has to decide are: 

1. You have not completed all the bankruptcy requirements, such as Budget Counselling;
2. A creditor or the Office of the Superintendent of Bankruptcy objecting to your release from bankruptcy; 
3. You have an extraordinarily high debt to the Canada Revenue Agency, which makes up most of your debt, or
4. You have been bankrupt at least twice before.

At a court hearing for your discharge, the court will hear from the Trustee, you and anyone who opposes your discharge.

The court may decide to:

• Order an Absolute Order of Discharge (Conditional Order of Discharge) if you fulfill certain conditions;  
• Put off your discharge for a period of time (Suspended Absolute Order of Discharge); or 
• Refuse to grant you a discharge (Refused Order of Discharge), usually where there has been a clear abuse of the bankruptcy process.

It is important to get either your Automatic Discharge or an Absolute Order of Discharge from the court. If you do not and the Trustee closes the administration of the file and gets their discharge, your creditors can start to collect the debts again. 

Watch "Understanding the bankruptcy discharge" from the Office of the Superintendent of Bankruptcy Canada. 

 Some debts are not discharged in a bankruptcy or released in a consumer proposal. This means you will still owe them after your bankruptcy or consumer proposal is over. 

 In a consumer proposal, if a creditor agrees that their debts will be released after the terms are completed and votes for the proposal, then that debt is released when the proposal is completed. However, this does not happen often. 

While the creditor cannot ask you to make payments on the debt during the bankruptcy/consumer proposal, you will still be responsible for the debt when you are discharged. The most common debts that are not discharged include:

• Government student loans, including loans under the Apprenticeship Act, where your Period Study End Date (PSED) is less than seven years from when you file the bankruptcy or the consumer proposal.  The Student Loans section explains the hardship exception that says you may apply to bankruptcy court if five years have passed since your PSED, regardless of when you filed the bankruptcy or consumer proposal. You have to prove both good faith and ongoing financial hardship. 
• Spousal and Child Support if there is a written agreement or a court order.
• Questionable debts, where there was fraud, misrepresentation, or you misappropriated funds while managing someone else’s money (fiduciary role).
• Court-ordered fines, penalties, or restitution.

Speak with your Trustee if you have questions about a particular debt and whether a bankruptcy or a consumer proposal will release you from that debt. 

 For more information and help, contact:

• Office of the Superintendent of Bankruptcy - regulates bankruptcies, oversees and licenses trustees in bankruptcy (licensed insolvency trustees), and has helpful general information for debtors and creditors
  Website  www.osb.ic.gc.ca
  Industry Canada
  Phone: 1 877 376-9902 (toll-free)
• A Licensed Insolvency Trustee.  Trustees are listed in the Yellow Pages under 'Bankruptcies,' or search for 'licensed insolvency trustee' online.  You can also get a listing of local Licensed Insolvency Trustees from the Office of the Superintendent of Bankruptcy at 1-877-376-9902 (toll-free) or osb.ic.gc.ca
• A credit counselling agency.  Credit counsellors cannot administer bankruptcies or consumer proposals but can help you in many ways, such as a debt management plan, budgeting, wise credit use, and general money management. The Financial Consumer Agency of Canada  - has a fact sheet about how to find a reputable Credit Counselling service: www.fcac-acfc.gc.ca.
• Financial Consumer Agency of Canada - fcac-acfc.gc.ca, or call 1 866 461-3222.  Lots of consumer information on many money-related topics.
• The Financial Consumer Agency of Canada also has a Financial Toolkit to help manage your finances. 

 

The Wireless Code offers consumer protection for cell phone users across Canada.  Contract rules under the Canadian Radio-Television and Telecommunications Commission’s national Wireless Code apply to all mobile phone contracts. The Canadian Radio-Television and Telecommunications Commission (CRTC) regulates telecommunications in Canada. 

The Code allows customers to cancel a contract more easily and at a lower cost.  Cell phone companies must be clear and up-front about contract details, including the minimum monthly cost. They can’t change key contract terms like minimum monthly cost or services unless the change benefits the customer or the customer agrees.

Cell phone companies must also provide the customer with a copy of the contract as soon as the customer agrees to the contract. If the customer agrees over the phone or online, the cell phone company must send the contract to the customer within: 

• one business day if the customer chooses to receive the contract electronically or
• 15 calendar days if the customer chooses to receive a paper copy of the contract.

Cell phone companies must also unlock newly purchased devices and all mobile devices free of charge. 

There should be a limit on data and roaming charges to prevent bill shock. Unless the account holder or authorized user expressly consents to pay additional charges, the service provider must suspend:

• national and international data roaming charges once they reach $100 within a single monthly billing cycle and
• data overage charges once they reach $50 within a single monthly billing cycle

If you are unhappy with your service, you can return your cell phone within 15 days of entering into a contract without penalty. You can use up to half your allowed monthly usage during the trial period.  If you are a person who self-identifies as having a disability, you can return your cell phone within 30 days, without penalty, if you are unhappy with your service, and use up to 100% of your allowed monthly usage during the trial period.

Although the Code does not affect how much cell phone companies charge for services, it does limit cancellation fees.   If you got a free or lower-cost phone as part of the deal, you’ll have to pay for the phone if you cancel early.  The contract terms must tell you how much the phone is worth so you can figure out the cancellation fee. You can cancel your contract after 2 years with no cancellation fees – even if you have agreed to a longer term. 

You can cancel your contract at any time. It is a good idea to do that in writing and keep a copy of the cancellation notice.

Under the Code, when a fixed-term contract runs out, the cell phone company may automatically extend it monthly. However, if they extend the contract, your cell phone company must give you at least 90 days' notice before your contract runs out.  If you don't contact them before the 90 days run out, the contract will automatically continue on a month-to-month basis.

If you want to cancel your contract and prevent it from rolling over into a month-to-month contract, you need to contact your cell phone company to let them know. It is a good idea to do that in writing. 

When a contract is automatically extended, it must have the same rates, terms, and conditions as you agreed to in the expired contract. If the cell phone company plans to automatically extend the contract when it expires, the contract must say so.

If you choose to upgrade or change your phone, the cell phone company must clearly inform you in the written contract if this will extend or change any other part of your contract. If a cell phone company offers you an upgrade, the company must clearly explain any changes to the existing contract terms or period should you accept the upgrade.

As with any contract, it is very important to understand the contract terms before you sign it.  Make sure you read it carefully.  Take time to think it over, ask questions, and get the salesperson to explain anything you do not understand. 

You can find the CRTC's complete Wireless Code online at crtc.gc.ca/wirelesscode. 

If you have a complaint about cell phone services or feel your cell phone company isn't following the Wireless Code rules and you can’t resolve it with your cell phone company, you can contact Canada’s Commissioner for Complaints for Telecommunications Services (CCTS) at 1-888-221-1687, or online at ccts-cprst.ca. The CCTS deals with consumer complaints about mobile, wireless and telephone services. Click here to learn more about how to file a complaint. If that doesn’t work, you can also try Industry Canada’s Office of Consumer Affairs, or Competition Bureau.  Contact the Office of Consumer Affairs at 1 800 328-6189, or online at consumer.ic.gc.ca, and Competition Bureau at 1 800 348-5358 or online at competitionbureau.gc.ca

Sometimes a creditor (company you owe money to) may use a collection agency to collect a debt if you have fallen behind in your payments.  They might hire a collection agency to collect the debt for them or sell the debt to the collection agency.

A collection agency is a business that arranges for and obtains payment of money owed to another person or organization.  For example, you might hear from a collection agency about a credit card debt, an outstanding loan or a line of credit.

Collection agencies and collectors (persons employed by a collection agency) must be licensed to do collection activities in Nova Scotia.  Service Nova Scotia licenses and regulates collection agencies and collectors in Nova Scotia under the Collection Agencies Act.

Yes, but the agency must first write to you and tell you that it has been hired to collect the debt or has purchased the debt.  When they contact you, the agency or collector must tell you the agency's name, the amount you owe, and identity themselves and how they are authorized to collect the debt.

There are other rules collection agencies must follow when trying to collect the debt.

A collection agency or collector must not call or talk to you until you have been notified in writing that they have been hired to collect the debt. When they contact you, the agency or collector must tell you the agency's name, the amount you owe, and identify themselves and how they are authorized to collect the debt.  They must first ensure you owe the debt before they try to collect it.  

The agency or debt collector must not:

• Make collect calls to you
• Contact you if you have written telling them to contact your lawyer (or your lawyer wrote to them saying that)
• Use documents, notices or letters which are made to look like court forms
• Pretend to represent the police or sheriff
• Lie about your credit or a legal action (directly or indirectly) to anyone
• Threaten you or use abusive or intimidating language
• Harass you or your family, for example, by calling every 15 minutes
• Try to collect the debt on a Sunday or any day before 8:00 am or after 9:00 pm
• Contact you more than 3 times within a 7-day period
• Give misleading information or try to make things difficult for you at work.

The agency or debt collector may:

• Contact your family, friends, neighbours, employer, or anyone else, but only to try to get your address
• Collect the debt, but not any additional amount
• Sue you if the creditor has assigned the debt to the collection agency in writing and you have been notified of the assignment.

Yes, but only to get an address for you.  However, they can contact anyone who is also on the debt - as a co-signer or guarantor, for example.

First, see if you can complain to the supervisor or manager of the collection agency to resolve the problem.  Otherwise, you can complain to Service Nova Scotia. You may contact Service Nova Scotia toll-free at 1 800 670-4357 or 902-424-5200 in the Halifax Regional Municipality, or visit novascotia.ca.  A collection agency's license can be suspended or cancelled in extreme cases.  

Contact the Financial Consumer Agency of Canada if you're dealing with

• the debt collection department of a federally regulated financial institution
• a debt collection agency hired by a federally regulated financial institution.

If a collection agency contacts you, keep a record of the agent contacting you, the name of the collection agency they work for, the name of the company they are collecting money for and the debt collector’s telephone number.

Ask for a written statement of what you owe, including any interest or late payment charges, whom you owe, and when you started owing it.  Take the time to check your records to ensure you owe the debt and that the amount owed is right.

If possible, and if you owe the money, pay the debt. Note that the agency cannot collect more than the amount you owe and cannot charge you for its costs to collect the debt.   However, interest can continue to build upon an outstanding debt.

If you can't pay the full amount right away, explain why. You may suggest some alternative repayment method, either a lump sum at a later date or a series of monthly payments, for example.  You might be able to negotiate just to pay a portion of the amount you owe. Never send cash, and always make payments in a way that you have a receipt - such as payment online, a money order, a cancelled cheque from your bank or a receipt from the agency.

If you make an agreement with a collection agency, ensure it is in writing.  If they will not put it in writing, send them a letter confirming the agreement, and keep a copy for yourself.

As dealing with financial problems is stressful, make a plan to manage your debts and get help from a credit counsellor if needed. Look at options you can trust to help you with your debts.

You may want to talk to a lawyer, especially if you do not owe the alleged debt. Nova Scotia Legal Aid may provide brief legal advice on credit and debt issues.

Yes, a creditor may sue you.  Time limits (limitation periods) apply to lawsuits over debt, so you should find out how old the debt is and the last time you made a payment. 

If you get a court paper like a Notice of Claim (Nova Scotia Small Claims Court), a Notice of Action on a Debt (Supreme Court of Nova Scotia), or any other official court paper, it is a good idea to talk with a lawyer.

A creditor can only seize property if it has a court order, meaning the creditor would have to sue you in court and win.

However, if the government is a creditor, for example, a student loan, tax debt, or overpayment of a social benefit, the government may seize GST rebates and tax refunds to recover the debt.

What assets can be seized with a court order depends on your circumstances. Two Nova Scotia laws, the Judicature Act and the Personal Property Security Act, outline basic rules about what property can or cannot be seized.

In Nova Scotia the following property cannot be seized (taken), even with a court order:

• Clothing, furniture or appliances that are not worth more than $5,000. In most instances, collection agencies are not interested in seizing these items.
• A vehicle that is not worth more than $6,500. However, if a financial institution lent you money specifically to buy the car and you fail to make payments on the loan, the car may be seized, whatever its value and whether or not you need it for work or to get to work, as in that case the financial institution is what is called a 'secured creditor' with special rights,  and the vehicle is collateral for the loan
• Tools or items that you use for your work to a value of $7,500
• Medical or health aids reasonably necessary for the debtor and their family
• Family's fuel and food.

A creditor must first sue you and get a court order before it can seize any of your goods or money. The creditor must notify you if they decide to sue you.

If you get a court paper like a Notice of Claim (Small Claims Court), a Notice of Action on a Debt (Supreme Court of Nova Scotia), or any other official court paper, it is a good idea to talk with a lawyer to get legal advice if you can.

A collection agency can only seize (take) or garnish income or wages if it has a court order, meaning the creditor would need to have sued you in court and won.

However, if the government is a creditor, for example, a student loan, tax debt, or overpayment of a social benefit like income assistance:

• the government may seize GST rebates and tax refunds to recover the debt without a court order; and
• debts owing to government benefit programs like CPP, OAS & GIS, Income Assistance, EI can be deducted from benefits payable by those programs, without a court order.

Certain income sources are protected and cannot be seized by a private creditor, even with a court order, including

• Canada Pension Plan (CPP) benefits
• Old Age Security (OAS) and Guaranteed Income Supplement (GIS)
• Income Assistance
• Employment Insurance (EI)

If you are working and there is a court order against you saying you owe a debt, the judgement creditor (who you owe the debt to) may have the Sheriff seize up to 15% of your gross wages (before tax and lawful deductions) to pay the debt. 

However, your wages cannot be seized if you would be left with less than:

• $330 a week, net pay (after tax and lawful deductions from your pay), or
• $450 a week, net pay, if you support a dependant.

A creditor must first sue you and get a court order before it can seize any of your goods or money. The creditor must notify you if they decide to sue you.

If you get a court paper like a Notice of Claim (Small Claims Court), a Notice of Action on a Debt (Supreme Court of Nova Scotia), or any other official court paper, it is a good idea to talk with a lawyer to get legal advice if you can.

For help and information:

• A Licensed Insolvency Trustee can provide professional advice about your options for dealing with debt, including a bankruptcy or consumer proposal.  Trustees are listed in the Yellow Pages under 'Bankruptcies,' or search for 'trustee in bankruptcy' online.  You can also get a listing of local trustees from the Office of the Superintendent of Bankruptcy at 1 877 376-9902 (toll-free) or osb.ic.gc.ca
  
  
  
• Office of the Superintendent of Bankruptcy - regulates bankruptcies, oversees licensed insolvency trustees, and has helpful general information for debtors and creditors
  Website  www.osb.ic.gc.ca
  Industry Canada
  Phone: 1 877 376-9902 (toll free)

• A credit counselling agency.  Credit counsellors cannot administer bankruptcies or consumer proposals. Still, they can help you in several ways, such as a debt management plan, budgeting, wise credit use, and general money management.  Make sure you find a credit counsellor you trust.  The Financial Consumer Agency of Canada  - has a fact sheet about how to find a reputable Credit Counselling service: www.fcac-acfc.gc.ca.
  
  
• Nova Scotia Legal Aid legal information about bankruptcy, and Debts

• Financial Consumer Agency of Canada, or call 1 866 461-3222.  Lots of consumer information on money-related topics, including Collection Agencies
  
  
• A lawyer in private practice or Nova Scotia Legal Aid if you cannot pay a lawyer.

 

Not every agreement is a legally binding contract. To be legally enforceable a contract has to be valid. That means it has to have certain key ingredients, specifically:

• Intent: The parties intended to make a contract.  If there is a dispute courts look at the words and actions of the parties to figure out whether a reasonable person looking at the situation would think that the parties intended to be bound by their agreement;

• Capacity:  The parties must have the legal ability to enter into an agreement. Generally, to have capacity a person must be mentally competent, must not be impaired by alcohol or drugs, and they must be 19 or older (19 is the age of majority in Nova Scotia). A minor (person under 19 in NS) may enter into contracts, but they can choose to void the contract when they reach the age of majority. However, there are exceptions. For example, employment contracts and contracts for "necessaries" of life, including food, clothing and shelter, cannot be voided when the person reaches the age of majority;
  
  
• Offer: An offer is the indication by one person to another that she is prepared to enter into a legally binding agreement;

• Acceptance: when one party accepts an offer made by the other party. A person can accept an offer with their by words (for example,  by saying or writing, “I accept your offer”). However, a person can also accept an offer through their actions (for example, by signing a contract, or when a reward is offered for finding and returning a lost dog and someone actually finds and returns the dog).

• Consideration: Something of value (consideration) is exchanged.  Consideration may be money, or a service, product, or anything that the parties consider acceptable in the situation. For example, if a baker sells a loaf of bread to a customer for $3.50 then the baker's consideration would be the loaf of bread and the customer’s consideration would be the $3.50.

• Legal purpose: A contract made for an illegal purpose will not be enforceable by the courts.

• Certainty of terms: The terms of a contract must be certain enough so that each party knows what they are obligated to do under the contract. If there is too much confusion or misunderstanding about what the terms of the contract are then there is not really any agreement for the court to enforce.

1. Shop around. Understand exactly what each company is offering. The more you know, the more you can negotiate. Compare price, guarantee or warranty, how long the contract is for and any other terms or conditions that are important to you.
2. Know who you're dealing with. Reputation is important, so ask friends or family for references. If you are not sure about a company's reputation check with the Better Business Bureau..
3. Negotiate. Most contracts can be negotiated. Use the information you gathered while shopping around to get the best service and price. Don't feel pressured to sign immediately – if the company or individual wants your business, they will listen to your concerns.
4. Read the contract and pay attention to the details. Make sure any verbal agreements or claims made by the salesperson are written into the contract. Cross-out any parts that you do not want to agree with, and have these changes initialled by you and the salesperson before you sign. Fill all blank spaces so that details cannot be added later by the salesperson.
5. Understand everything in the contract. Ask the salesperson questions and get advice if there are parts that  you don't understand. Don't forget that the fine print is part of the contract too. You can have a lawyer review the contract if you feel you need to.
6. Know who to call for help or make a complaint. Ask the salesperson for a customer service phone number and the steps to take if you need to make a complaint.
7. Remember that a signed contract is a legal document, so you will have to live with what you agreed to. Generally, a contract cannot be changed or broken unless you and the other party both agree.
8. Know how to get out of it. In some cases a short period of time is allowed to cancel a contract without penalty; it's called the "cooling off period" and it should be described in the contract. Even if it isn't, you might still have a cooling off period. Contact Service Nova Scotia to find out if there is a cooling off period in your situation, and how long it is if there is one. To cancel a contract before it is over, both sides have to agree, but usually it will cost you.
9. Sleep on it. Is this what you really need and want? It's okay to change your mind before signing or agreeing to a contract.
10. Once it's signed, get a copy and keep it. You may need it later on for reference, or to launch a complaint if you have a problem.

Adapted from Justice Education Society of BC and the Financial Consumer Agency of Canada.

If a contract is valid then the parties are bound by it. That means most of the time a contract cannot be cancelled without penalty.

If you change your mind and no longer wish to be bound by the contract, in most cases you'd need to try to negotiate with the other party to try to get them to agree to let you out of the contract.

If the other party does not agree to let you out of the contract, they may allege the contract was breached (that you broke the contract terms) and you may still be on the hook for whatever it is you agreed to under the contract, or at least for whatever penalty might be in the contract for breaking its terms, or for the remedies a court can award for breach of contract.

However, there are a few exceptions.

Some contracts might be cancelled depending on the type of contract or the conduct of the parties. The contract itself might have terms saying how the contract may be cancelled, and if it is, what the consequence would be.

Also, in some cases there might be an automatic cancellation period, sometimes called a "cooling off period", that allows one of the parties to change their mind without consequences and withouth having having to give a reason, within a specific window of time.  If there is a cooling off period it would either be specifically written in the contract, or come from a statute like Nova Scotia's Consumer Protection Act.  For example, in Nova Scotia there is a cooling off period for gym contracts, payday loans, direct sales, online sales, and prepaid funeral service contracts.

If a contract does not have all the ingredients listed in the section “Basic Ingredients of a contract" then it is void and likely would not be legally enforceable because it is invalid. Examples of invalid contracts would be contracts for the sale of stolen goods, contracts made with a person who lacks capacity, or contracts where nothing of value is exchanged.

Some contracts are voidable and might be cancelled for reasons such as:

• a serious misrepresentation made by one of the parties;
• a mistake about a key contract term; or
• duress or undue influence or pressure being put on one of the parties.

Before a contract is made, the parties often talk about the terms of the agreement. They may make statements to encourage the other person to make the contract. These statements are called representations. 

Misleading,  untrue or inaccurate representations are known as misrepresentations. A misrepresentation is something that is untrue, inaccurate or misleading that convinces the other person to enter into a contract. The law recognizes several different kinds of misrepresentation:

• Fraudulent or false misrepresentation is when a person misrepresents something intentionally or recklessly, knowing it is false, to convince another person to enter into a contract.  For example, a person who sells fake weight loss pills that they know don’t really work.

• Negligent misrepresentation is when a person carelessly makes a misrepresentation that they really should have known not to make. For example, a health care professional who sells phony weight loss pills that don’t work and who didn’t bother to research them.

• Innocent misrepresentation is when a person makes a misrepresentation that they had good reason to believe was true.  For example, a person who sells phony weight loss pills, but who was told by a doctor that they were effective.

If a person decides to enter into a contract because of a misrepresentation, they may be able to get out of the contract, or receive damages (money) from the party that made the misrepresentation, depending on the misrepresentation and all of the facts.

If a person can prove that they were forced into a contract under duress or because of undue influence then the contract may not be enforceable.  Duress is a wrongful act or threat that makes someone do something against their will. If a person signs a contract because the other person threatened them the contract may be unenforceable, depending on the circumstances and kind of threat that was made.

Undue influence is when someone abuses their power over another person to convince them to do something against their will. If there was an unequal relationship where one person took advantage of another person’s position to pressure them into making a contract, that contract may be unenforceable..

If, through no fault of either party, something happens so that the contract becomes impossible to fulfill then the contract may be what is called frustrated and the parties may be excused from the contract.

For example, imagine that Alice agrees to purchase Betty’s car for $2500. Unfortunately, before they can complete the sale Betty’s car is stolen. Through no fault of either party, Alice no longer has a car to sell to Betty. The contract would be frustrated and Betty would not have to pay.

This is different from a party breaching (breaking) the terms of a contract, as the event is due to unforeseen circumstances and is not because of the actions of either of the parties.

Breach of contract is when a party does not do what they agreed to under the contract.

For example, imagine that Alice entered into an agreement with Betty to shovel her driveway for $15 on a particular day. If Alice does not show up to shovel Betty's driveway on the day agreed to, then she has breached their contract.

Someone who breaches a contract might be sued by the person who did not break the contract terms. If they are successfully sued in court then the party who broke the contract terms may have to pay damages (compensation), or in some cases the judge might order them to do what they promised to do under the contract.  

A breach of contract does not automatically end the contract. Instead, the person who did not break the contract terms gets to decide whether to treat the contract as still in place, or to treat it as at an end.

Someone who breaches a contract may be sued by the other party. The lawsuit would either be in Small Claims Court or the Nova Scotia Supreme Court depending on what the case is about, the amount of money involved, and what remedies the plaintiff is seeking.

If the other party is successful with their lawsuit and the judge decides that there was a breach of contract then the next step is for the judge to decide what remedy they should grant.

A court will look at all of the circumstances of the case before choosing what remedy to award. The following are the general types of remedies that a court may award:

• A party may be compensated in damages (money) for the loss they suffered or for the work they completed under the contract;
• The party that breached the contract may be ordered to do what they were supposed to do under the contract in the first place.  This is called specific performance;
• The contract might be rescinded (cancelled) so that the parties are no longer bound by it.

Even if there is a breach of contract, the person who did not break the contract terms is expected to mitigate their losses.  This means they are expected to take reasonable steps to avoid further damage or increased costs arising from the breach of the contract.

If you are thinking about a law suit it is a good idea to see a lawyer to get legal advice before you decide whether that is the best course of action, and also to decide which court to go to.

Most businesses who sell things to the public in Nova Scotia are subject to the Consumer Protection Act.

The Consumer Protection Act applies whenever a consumer sale is made by a seller in the ordinary course of business in the province.

A consumer sale is a sale where goods or services are purchased for the buyer’s personal consumption or use. A seller is any person who is in the business of selling goods or services to buyers.

Under the Consumer Protection Act there are certain terms that every consumer sales contract is deemed to have even if they are not mentioned by the seller or written into the contract.

These are the terms that automatically apply to every consumer sales contract in Nova Scotia:

• The seller can only sell goods if they are the true owner of the goods; this is called a "right to sell" condition

• A buyer has the right to use and enjoy the goods that they purchase. No other party may use or enjoy the goods without the buyer’s consent; this is called the warranty of quiet enjoyment

• The goods must be free of any financial claims like outstanding payments or liens; this is called the "freedom from encumbrances" warranty

• The goods must fit the description provided by the seller; this is called the "correspondence with description" condition

• If the seller is aware why the buyer is purchasing the goods then the goods must fit the purpose that the buyer is buying them for; this is called the "fitness for purpose" condition

• The buyer must be able to use the goods for their ordinary purpose, unless there are defects that are acknowledged by the buyer and the seller; this is called the "merchantable quality" condition

• The goods are presumed to be new and unused unless they are described otherwise

• Goods must be durable for a reasonable period of time based on their normal use and the circumstances of the sale

• If services are performed, the services are to be performed in a skillful and professional manner.

The seller is not permitted to override these terms, or state that they do not apply. If a seller does attempt to override these terms, or state that they do not apply, then a court would likely consider the contract to be void and unenforceable.

Direct sellers are sellers who sell goods or services away from their usual place of business.  Door-to-door sales are the most common example, but direct sellers also include telemarketers and people who sell goods at home-based parties.

Direct sellers are regulated under the Direct Sellers’ Regulation Act. Every direct seller must be licensed by Service Nova Scotia.  

Most direct sales contracts have to be in writing and they have to include:

• the direct seller’s name, business address and telephone number

• the salesperson’s name and signature

• the date and place of the contract

• an itemized price of the goods or services, terms of payment and the total cost of the contract

• a good enough description of the goods and services to identify them

• a statement of the buyer’s cancellation rights

• the delivery date of the goods or services if not provided on the transaction date

• the completion date for providing the services if applicable

• where credit is extended, a statement of any security taken and the cost of borrowing

• a description of any goods taken in trade and the value given to the goods; and

• the signature of the purchaser.

A direct sale can be cancelled within 10 days of making the purchase. The buyer has to provide notice, in writing, to the seller that they wish to cancel the sale. The buyer does not have to tell the seller why they want to cancel. The 10 days to cancel a sale starts from the day the buyer receives the contract.

For more information on your rights when dealing with direct sellers, contact Service Nova Scotia at (902) 424-5200 or 1-800-670-4357.

 

• Information about consumer contracts from Consumer Affairs Canada's Canadian Consumer Handbook
• Service Nova Scotia - consumer information, or call 1 800 670-4357 or 902-424-5200
• Better Business Bureau of the Atlantic Provinces

Copyright is the exclusive right to produce, reproduce, perform or publish an original work, such as an original literary, dramatic, musical or artistic work, or any substantial part of it. It also applies to performers' performances, communications signals, and sound recordings. The person who creates the original work is called the author of the work.

In Canada, copyright extends for the lifetime of the author, performer or maker of the work and for 70 years after their death. Specific works that are no longer subject to copyright are said to be in the public domain and may be copied, performed and published, generally speaking.

The first owner of a copyright is the author of the work, unless the work is subject to an exception, such as when the work is created in the course of employment, or it is a photograph.

Copyright exists automatically when a person creates an original literary, dramatic, musical, artistic work or other work (provided the conditions in the Copyright Act have been met).

For works to be eligible for Copyright protection in Canada, at the date of the making of the work the author must have been:

• a citizen of Canada,
• a person ordinarily resident in,Canada,
• or a citizen or ordinary resident of another treaty country, meaning
  • a Berne Convention country,
  • a Universal Copyright Convention country
  • or a World Trade Organization [WTO] member. 

For copyright to exist, the work must be fixed in a material form. For example, a poem must be written down. Copyright will apply upon the first publication of the work.

Performer’s performances and sound recordings are also protected when they take place or are made or performed as applicable in Canada or a Rome Convention country by a citizen or company with headquarters thereof.  

Copyright does not protect:

• ideas,
• concepts,
• facts,
• information,
• slogans,
• most titles, plots, or methods, such as a method of teaching.

Copyright is acquired for an expression of an idea and not the idea itself. For instance, a particular idea or theme behind a romantic poem is not subject to copyright, but the expression of the idea is. For example, in a class of 15 students who write their own versions of a story, each student would have a copyright in their version.

Copyright can be registered with the Canadian Intellectual Property Office. While copyright exists even without registration, a certificate of registration is a notice to the public that copyright exists in the work and is owned by the registered owner of the work. It creates the legal presumption (legal starting point) that the registered owner is the true owner of the copyright in that work.

This doesn’t guarantee that the validity of ownership or the originality of a work will never be questioned.  Copyright is territorial in nature; meaning copyright protection depends on the laws of the country in which the author seeks protection.

There are several international treaties and conventions that protect copyrightable works. The Berne Convention is the main international convention that addresses copyright protection. It provides a common framework and minimum standards for copyright protection to be implemented by contracting states and extended to foreign nationals the same as domestic copyright holders. Canada has been a signatory to the Berne Convention since 1883.

The general rule is that people may not copy i.e., produce, reproduce, publish or perform works that are subject to copyright. However, there are some exceptions. One is the 'fair dealing' exception that allows limited portions of works subject to copyright to be copied for private study, research, education, parody or satire. There are also fair dealing exceptions for criticism or review and news reporting, provided the source of the work is provided along with the name of the author, performer, maker or broadcaster if mentioned in the source. How much use of a work will be considered fair dealing depends on the specific circumstances of each use. Plagiarism issues often revolve around the amount of copyright-protected material used.

In the case of material used for study, particular schools and universities may have entered into a photocopying licensing agreement that allows students and faculty to photocopy certain portions of copyright-protected material that would otherwise constitute copyright infringement. If you have concerns about whether the use of a copyrighted work would be copyright infringement in such a case, the school administration or library should be able to tell you about its copyright policy. 

Images posted on the internet are subject to the same copyright protection as images published in any other form. The Copyright Act also allows for the reproduction of works for an individual’s private purposes.

Regarding the public performance of musical works, sound recordings, theatrical works and similar subject matter, performers or presenters must make sure that the rights to perform or present the works subject to copyright are secured either through the venue where the performance will happen or through the author or owner directly. Also, a licence may be needed from a Collective Society. The Society of Composers, Authors and Music Publishers of Canada (SOCAN) administers performing rights and reproduction rights on behalf of member creators and publishers. The Society issues licences and collects royalties on behalf of its members.

Under the Copyright Act, an author has a moral right in the work they create. This moral right is the right the author has to the integrity of their work, and the right to be associated with it as its author, or under a pseudonym. This may relate to when that work is reproduced, performed, adapted, communicated to the public or otherwise dealt with as outlined in the Copyright Act.

Moral rights are infringed when, to the prejudice of the honour or reputation of the author, the work is distorted, mutilated, otherwise modified, or used in association with a product, service, cause, or institution without permission. Moral rights also give the author the right to remain anonymous. Unlike copyright, moral rights cannot be assigned to other owners, but they may be waived by the author.

A trademark is a sign, or a combination of signs, used in connection with a good or service of an individual or organization in the marketplace that distinguishes it from those offered by others. A trademark can be an ordinary trademark or a certification mark. An ordinary trademark could include words, designs, letters, sounds, colours or a combination of these. It could also include tastes, textures, moving images, modes of packaging, holograms, scents, three-dimensional shapes or combinations thereof, all of which operate to distinguish goods and services from others.

Certification marks are marks that can be licensed to various individuals or entities to show that the goods and services meet a defined standard. The trademark must identify good(s) or service(s) and must be in current use or be proposed to be used. The date of first use is significant to trademark claims.

Trade names are not the same as trademarks. Trade names are names under which a business operates or conducts business, whether it is the registered company name. They may also allow a corporation to operate with a different name from its registered corporate name e.g., a numbered company in Nova Scotia doing business under its trade name “123 Electric”. Unlike a trade name, a trademark is associated with goods and services that the Company sells and provides protection for the distinctive elements of such goods and services.

It is important to note that the registration of a company or trade name with the Registry of Joint Stock Companies does not protect it as a trademark. 

It is possible to have several trademarks under a trade name (which itself may or may not be a trademark). We often see this with consumer product companies where several sub-brands exist.

When you register your trademark, you get the sole right to use the mark across Canada for 10 years. You can renew your trademark every 10 years after that.

A registered trademark is one that has been entered into the Register of Trademarks. The certificate of registration is direct evidence that you own the trademark.

Registration of a trademark is not mandatory, but it does make it easier for the trademark owner to prevent others from using the trademark, or similar ones, in association with the same or similar wares and/or services. 

By using a trademark for a certain length of time, you may have rights under common law for the use of the mark. However, you may have to deal with any disputes related to your use and ownership of the mark and court proceedings might be expensive. If you do not actively use the mark in Canada, your registration may be expunged from the Register of Trademarks. 

A trademark is a unique form of IP that can effectively remain in force perpetually. Since trademarks are brand/product identifiers this is even more significant!

The registration process can also help a business make sure that it is not infringing the trademark of another business. Registration also provides public notice of ownership of the trademark and the origin of the good or service.

A trademark agent may help persons, organizations and businesses in determining whether a selected trademark has the potential to be registered and can assist with the application process. A list of trademark agents is provided on the Canadian Intellectual Property website. Separate applications must be filed for each country in which protection for a trademark is desired.

The applicant for registration of a trademark must be a “person” i.e., an individual, partnership, trade union, association, joint venture, or corporation. The applicant may also be two or more persons.

Several specific types of trademarks may not be registered. These include:

• Trademarks that would be likely to confuse the minds of average consumers due to their similarity with previously registered or pending trademarks.
• Trademarks that are clearly descriptive or deceptively misdescriptive of the wares and/or services they are to be associated with.
• Trademarks that indicate the geographical origin or mode of production of the product.
• Trademarks that make use of national flags and coats of arms.
• Trademarks that use offensive imagery or words.
• Trademarks that are names and surnames are also excluded, except where some goods or services have become well-known under the name such that they have acquired a second meaning in the eyes of the public.

 A patent is an exclusive right granted for an invention which prevents others from making, using, distributing, importing, or selling such invention without the consent of the patent owner. Inventions could include products, compositions, machines, processes, or an improvement of these. Given that patents are territorial rights, they apply in the country or region the patent is filed. In Canada, the first to file a patent application would be granted the patent for up to 20 years.

Under the Canadian Patent Act, protection is available for any new and useful art, process, machine, manufacture, composition of matter or any new and useful improvement on any of these.

To qualify for a patent, the invention must be:

• new 
• useful, and 
• inventive.

New
The invention must be the first of its kind in the world. The invention must not have been previously disclosed to the public by anyone other than the inventor. Even disclosure of the invention to the public by the inventor before the patent application is filed can in some circumstances (such as trade exhibitions) prevent the invention from being 'new' and may ruin the potential for it to be patented. 

Useful
The invention must be functional and operative. The invention must add value to the existing technology. 

Inventive
The invention must be inventive, show ingenuity and not be obvious to a person of ordinary skill working in the art or science it pertains to. A person of “ordinary skill in the art” could be someone well-versed with technology through education and/or experience in the area. The reference point for comparison to existing technology is any published research, literature, existing inventions (whether patented, non-patented or having an expired patent) and in some cases existing traditional knowledge. This gamut of pre-existing knowledge is called prior art.

Rights in a patent are not on the entire invention/product/process but are restricted to the "claims" made. Nothing stops someone from making a patent application for an improvement on a common object like a pen or stapler, so long as they restrict their patent rights, via "claims”, to the new, useful and not obvious features of the invention/improvement. 

Inventors can search the Canadian Patent Database to find out what inventions are already patented in Canada. Some things such as ideas, concepts, scientific principles, methods of treatment, forms of energy, and printed matter cannot be patented. Computer programs may be patented only where they offer new and inventive solutions to problems through modifications to how the computers work.

Since patents are granted to the first inventor to apply, it is wise for an inventor to file for a patent as soon as possible, but not so soon in the development process that key features of the invention are not yet known. Also, as mentioned above, disclosure of the invention before applying may ruin the potential for a patent in some cases.

Making a patent application can be a lengthy and complex process and inventors often seek professional help from a registered patent agent. A list of registered patent agents is provided on the College of Patent Agents & Trademark Agents website. Separate applications must be filed for each country in which protection for a patent is desired.

Industrial designs are the features of shape, pattern, configuration or ornamentation that give an article visual appeal, such as the shape of a lamp or a chair. Industrial designs do not include features of an article that are dictated solely by a utilitarian function. It protects the aesthetic look/ design of the entire article or parts of it, not how it is made or functions.

The Industrial Design Act grants the registrant protection for the three-dimensional features of shape and configuration, and the two-dimensional features like pattern, ornament and colour, of a finished article. 

Items such as ideas, methods of construction, materials used in the construction of an article, or the function of an article are excluded from registration. 

Registration provides the owner with the sole right to make, import for trade or business, sell, rent, offer or expose for sale or rent any article produced with the same or a substantially similar appearance for a period of ten years from the date of registration in Canada, or 15 years from the date of filing whichever ends later.  To attract protection, the design must be novel, must not have been in prior use by another person, must not closely resemble other registered or pending designs, and must be sufficiently original, involving a “spark of inspiration”.

Industrial designs can only be protected through registration with the Canadian Intellectual Property Office. However, it is important to note that if fewer than fifty copies of the article using the design are produced and the design is original, created by the author’s exercise of skill and judgment the design may be protected as an artistic work under copyright. If the article is reproduced more than fifty times, it may not be an infringement of copyright for a third party to copy such article except an exception applies (the “more-than-50 rule). Also, some protection for a product design may exist under the trademark as a distinguishing guise in some circumstances such as when consumers associate the design of a product with a business such that it has acquired distinctiveness. Protection will last for as long as the distinguishing guide is used and registered and this would also work as an exception to the more-than-50 rule. 

 The general rule is that an application for an industrial design must be filed within one year of the design being offered for commercial sale or displayed to the public anywhere in the world. Separate applications must be filed for each country in which protection for an industrial design is desired.

• If you can, consult with a lawyer who practices intellectual property law.
• Search in all jurisdictions (places) where you plan to market and sell your product.  This will minimize the risk of infringing on someone else's IP.
• If you want to launch your product or process in multiple jurisdictions, make sure you meet all requirements in each jurisdiction.  To save time and money consider whether you can take advantage of a convention or treaty to file in multiple jurisdictions, rather than filing in each country.
• Register your IP. Registration is proof of ownership and acts as notice to the public. In the event of litigation, the registrant is often presumed to be the owner, where a registered and unregistered IP compete.
• Once you register your IP, be diligent about paying the necessary renewal fees.
• Use well-crafted contracts. It is important to have contracts in place when working with other people (partners, service providers, employees, contractors, etc.). If you are using your design, work, invention etc. make sure that fact is stated in the contract.
• Consider adding confidentiality clauses to contracts and/or having non-disclosure agreements in place to prevent misappropriation of your work. 

More information on each of these types of intellectual property  is available on the Canadian Intellectual Property Office website at http://cipo.gc.ca, and further information may also be available through Business Canada.

If you need advice about an intellectual property issue then consult with a lawyer in private practice who does intellectual property work. Here is some information about ways to find a lawyer: https://www.legalinfo.org/lawyers-legal-help/find-a-lawyer

Consumer reporting agencies collect information about a person’s credit and payment history. Consumer reporting agencies are also called credit reporting agencies, or credit bureaus. The two main credit reporting agencies in Canada are Equifax and TransUnion. Credit reporting agencies must be licensed by Service Nova Scotia  to operate here, and must follow the rules in Nova Scotia’s Consumer Reporting Act.

A credit report summarizes your credit history. It includes information about your borrowing and repayment history, whether you have filed for bankruptcy, or have collection activities or judgments against you. The Financial Consumer Agency of Canada gives more information about credit reports and credit scores, and building a good credit history, at www.fcac-acfc.gc.ca

Prospective creditors, landlords, insurance companies, employers, may use this information to decide whether you are a good or bad credit risk. For example, you may be asked to agree to have a consumer reporting agency give a credit report about you when you apply to:

• borrow money
• hook up power
• get a credit card
• rent an apartment
• get insurance
• get a job.

If a prospective creditor, landlord, insurance company or employer denies you a benefit or increases the cost of benefit to you based on your credit report, they must notify you immediately of the denial or increase in cost.

Your credit score is a three-digit number that comes from the information in your credit report. It shows how well you manage credit and how risky it would be for a lender to lend you money.

In most cases you must consent in writing to have your credit report given out. But there are exceptions:

• A credit reporting agency may give out your credit report without your consent if a court orders it
• A governmental body may access information in your credit file (see below), and
• If you have applied for a loan or other credit and you did not give your written consent to check your credit, the creditor may still contact the credit reporting agency. In this case the creditor must let you know that they will check your credit, and must give you the name and address of the credit reporting agency within 10 days of requesting the credit check. This rule applies to a potential lender, employer, landlord, insurer or other authorized recipient of a credit report.

Other than the exceptions listed here, no other person is authorized to obtain the information held by a credit reporting agency without your written consent, and a credit reporting agency is not allowed to sell, lease or give the information contained in your file other than to another credit reporting agency.

Yes. Any provincial or federal government department may obtain your name, address, former addresses, and place or former places of employment from a consumer reporting agency. In addition, the collection services division of Service Nova Scotia may obtain personal information such as your address, former address, places or former places of employment, and social insurance number, in order to aid in collecting a debt or fine owing to the Nova Scotia government.

Yes. But the lender may refuse to give you a loan or credit without that information.

Your credit report may contain information about your:

• identity, including your social insurance number and date of birth
• residence
• dependents
• marital status
• employment
• borrowing and repayment history
• income
• assets and liabilities
• credit worthiness
• education
• character & reputation
• health, physical or personal characteristics
• mode of living.

Information in your credit report must be in writing, and be fair and accurate. You have a right to have any inaccuracies in your credit report corrected.

You have a right to see your credit report. The reporting agency must also have someone available to explain your file to you. If you wish to see your file, you can make an appointment to do so in person at the credit reporting agency’s office. You may also request a copy of your credit file by mail, or online. It is free to get your credit file in person or by mail, but there is usually a fee to get it online. You must provide identification to view or get a copy of your credit file.

The Financial Consumer Agency of Canada has information about Ordering Your Credit Report and Score, including how to get a free credit report. Ordering your credit report has no effect on your credit score.  It is a good idea to order your Credit Report at least once a year, from each of Equifax and TransUnion, as the two organizations may have different information about you.  It is particularly important to order your Credit Report if you have been a victim of fraud, or if there has been a data breach where your personal financial information may be at risk.

Read this short article about why you should order your Credit Report.

No. A credit reporting agency cannot demand that you waive any legal rights in order to see your credit report.

If you find incorrect information in your file, you may file a protest or complaint with the credit reporting agency. The agency must immediately verify the information – for example, by obtaining proof of the debt from the creditor. If the information cannot be verified, the agency must remove the inaccurate information from your file.

If the information is accurate, the reporting agency must record your protest in the file and tell you, and anyone who got your credit report in the past 60 days, what action was taken. You are allowed to put a short note in your file (consumer statement), up to 100 words, explaining the circumstances of a debt, judgment, late payment, etc.

Alternatively, if you are dissatisfied by the decision of a credit reporting agency regarding your protest or complaint, you can appeal to Service Nova Scotia.  Get information here if you are making a complaint about a federally regulated financial institution (a bank, for example).

If you feel you have been treated unfairly by a credit reporting agency you can make a complaint directly to the credit reporting agency, and/or contact Service Nova Scotia at 1 800 670 4357 or 902-424-5200.

For most unpaid debts the time limit is 6 years; however this time period can change depending on the type of debt, and the place you live in Canada.

In Nova Scotia in most cases a creditor must sue within 2 years in order to get a judgment from the court and extend the life of an unpaid debt. However, this time period could extend as far as 20 years depending on the circumstances.  The Financial Consumer Agency of Canada has information about how long certain information stays on your credit report. However, you will likely need to contact the credit reporting agency directly (Equifax or TransUnion) for information about how long negative information stays on your credit report.

A bankruptcy stays on your credit record for 6 years from the date you are discharged, unless you have been bankrupt more than once, in which case it will be on your credit report for 14 years.

No. All of the information in the file must come from within Canada. Foreign sources are not allowed.

There are several ways to improve your credit score, including

• pay all bills on time;
• avoid going over your credit limit; 
• making fewer applications for credit; 
• obtaining your credit report and reviewing it to ensure all information is accurate. 

However, be wary of companies who say they will “repair” your credit. If the information contained in your credit report is true and accurate, no company can change the information, nor can they do anything more than you could do by simply reviewing your report and protesting any inaccurate information directly to the credit reporting agency.

The Financial Consumer Agency of Canada has information about how to improve your credit score.

• Service Nova Scotia  licenses credit reporting agencies, and deals with consumer complaints. Contact them at (902) 424-5200 (in Halifax) or toll-free at 1-800-670-4357, or online at www.gov.ns.ca/snsmr/
  
  
• Financial Consumer Agency of Canada – comprehensive consumer information about credit reports, credit scores, and building a good credit history. Visit www.fcac-acfc. gc.ca or call 1 866-461-3222.

• A credit counselling agency.  Credit counsellors can help you in a number of ways, such as a debt management plan, budgeting, wise credit use, and general money management. The Financial Consumer Agency of Canada  has information about how to find a reputable Credit Counselling service: www.fcac-acfc.gc.ca.
  
• A trustee in bankruptcy, also called a Licensed Insolvency Trustee, can provide professional advice about your options for dealing with debt.  Trustees are listed in the Yellow Pages  under 'Bankruptcies', or search for 'trustee in bankruptcy' online.  You can also get a listing of local trustees from the Office of the Superintendent of Bankruptcy at 1 877 376-9902 (toll free) or osb.ic.gc.ca
  
• Office of the Superintendent of Bankruptcy - regulates bankruptcies, oversees and licenses trustees in bankruptcy (licensed insolvency trustees), and has helpful general information for debtors and creditors
  Website  www.osb.ic.gc.ca
  Phone: 1 877 376-9902 (toll free)

This simplified foreclosure process applies to most, but not all, situations.

1. Mortgage Default	Borrower defaults, no longer makes mortgage payments.
2. Demand Letter	Lender sends borrower a Demand Letter advising of the default and giving a deadline to fix it.
3. Notice of Action and Statement of Claim	If the borrower does not fix the default by the deadline, the lender starts a legal foreclosure process in the Supreme Court of Nova Scotia. The lender starts by delivering (serving) the borrower with court documents: Notice of Action and Statement of Claim. The named borrower must be served in person and becomes the defendant.
4. Defence	After being served with the Notice of Action and Statement of Claim, the borrower can file a defence or apply to the court for relief. The borrower must act within these number of business days based on where they are served: 15 days: in Nova Scotia 30 days: elsewhere in Canada 45 days: outside of Canada.
5. Motion to Court for Foreclosure Order	If the borrower: does not file a defence within the required time, the lender can apply to the court for a Foreclosure Order. files a defence, a court hearing will decide if the defence is valid. If unsuccessful, the lender can apply to the court for a Foreclosure Order.
6. Court issued Foreclosure Order	The court reviews the lender’s Foreclosure Order to confirm: the mortgage is valid  the amount of debt owed is verified. If the judge is satisfied, they issue the Foreclosure Order.
7. Notice of property sale at Public Auction	Once the court issues a Foreclosure Order, the lender may schedule the property sale at public auction. Notice of public auction is: published twice in a newspaper before the auction, and sent to the borrower by regular mail at the mortgaged property (or last known address, if different) at least 15 business days before the public auction sale.
8. Sale of the property at Public Auction	The public auction happens in the property’s judicial district. The property is sold to the highest bidder. The auctioneer or sheriff prepares a deed (legal document) transferring ownership.  Note: Generally, the borrower should move out on the public auction date.
9. Claim for Deficiency or Surplus after the sale	If the property sells for less than what is owed (deficiency) to the mortgage lender, they can apply for a court judgment against the borrower for the shortfall amount. The borrower gets notice of the court hearing date for the deficiency claim, providing an opportunity to participate in the hearing. If there is money left over from the sale (surplus) after payment of the mortgage debt and auction fees, the auctioneer pays the surplus into court. The court holds the surplus funds pending an application by a person claiming entitlement to the funds–the borrower or another lender.
10. Confirmatory Order	The lender applies to the court for an order confirming that the foreclosure procedure met the Foreclosure Order requirements.

 

Most people who buy a home borrow money from a bank or other financial institution to help cover the purchase price. Usually, the loan is secured by a mortgage on the property. 

Being in default means you have broken the mortgage terms. Mortgages have many promises the borrower must follow. Breaking any of these promises can be a default. The most common default is not making mortgage payments when they are due. 

If you default on your mortgage, your lender may take legal steps to foreclose on (take possession of and sell) your property. 

Most mortgages have an acceleration clause stating that if a payment is missed the entire amount owed must be paid immediately. Some mortgages let the lender demand repayment in full and initiate foreclosure at their discretion, without default.

Plaintiff: The lender who started the foreclosure process. Their lawyer will be at the court hearing on the lender’s behalf.

Defendants may include:

• you, and any other borrowers on the mortgage
• the guarantor, if someone acted as one
• Licensed Insolvency Trustee, if the borrower is bankrupt or was bankrupt during the mortgage
• owner of the property, including any new owner.

The lender can start the foreclosure process to take possession of and sell your property if you default on your mortgage. 

Default means you break any of the terms of your mortgage, including being late with mortgage payments. If you do not make payments as scheduled, the lender has the legal right to apply to court for a Foreclosure Order directing the sale of the property at public auction. 

When you arrange a mortgage, it is a contract between you and the lender. You agree to pay back the principal and interest according to a set schedule. The house is security for the loan. You are the legal owner of the house, but the lender will record the mortgage against the property at the Land Registry to protect their interests.

Lenders usually do not want to foreclose and will make reasonable efforts to allow you to keep your home, including refinancing or setting up a payment plan. Talk to your lender if you are having trouble making mortgage payments. Do not wait until legal proceedings have started against you, as costs can quickly add up, making it harder to resolve.

Before taking legal action, the lender or their lawyer will usually send you a Demand Letter. By the time it is sent, the lender has usually hired a lawyer. This will increase the amount of money the lender seeks to collect.

A Demand Letter tells you:

• why you are in default (for example, you have missed payments)
• the amount you owe (usually including arrears and legal costs)
• a deadline for making the payment (often 10 days)
• that if you do not pay, the lender will take legal action.

If you get a Demand Letter:

• call the lender or their lawyer right away and try to negotiate to get your mortgage back on track
• ask whether you can refinance to lower your mortgage payments and pay them over a longer period of time
• try speaking with a different lender or mortgage broker to see if you can get a new mortgage to pay off the original one
• get advice from a credit counsellor or licensed insolvency trustee
• consider selling your property.

If you do not respond to a Demand Letter before the stated deadline or cannot negotiate an agreement with the lender, they can start the foreclosure process in court.

If no defence is filed and the lender goes through the normal steps, it usually takes 2 to 3 months from the filing of the Notice of Action and Statement of Claim to the conclusion of the public auction sale. It may take longer, depending on the court schedule and other factors.

The 2 to 3 months consist of: 

1. issuance and service of the Notice of Action and Statement of Claim
2. 15 business days to file a defence after being served the Notice of Action (longer if you are served outside of Nova Scotia, as explained above)
3. if no defence is filed, the lender scheduling the motion to court for a Foreclosure Order with 4 business days’ notice.
4. the 15 business days for required newspaper advertisements and notices following the issuance of the Foreclosure Order.
5. the 15 business day time limit for the successful bidder to pay the full purchase price.

The days are business days, and do not include weekends and weekdays when the court is closed. The rest of the time involved will depend on how quickly the lender decides to proceed, and other factors such as the time required for service.

If a defence is filed, the above timeline can vary a lot. The lender may make a motion to court for Summary Judgment, and how long things will take will depend on the contents of the defence, as well as the court schedule.

The Notice of Action and Statement of Claim are the forms the lender files with the Supreme Court of Nova Scotia to start the foreclosure process. The forms come from Nova Scotia’s Civil Procedure Rules. The rules are available online at courts.ns.ca.

A Notice of Action is a court document that tells you that the lender has started a legal process against you because you broke the terms of the loan or mortgage. It tells you who is involved in the Foreclosure process and how long you have to file a defence.

A Statement of Claim is a court document attached to the Notice of Action. The Statement of Claim outlines the details of what the lender is claiming against you and may include:

• the date of the mortgage
• the property involved 
• mortgage registration information at the Registry of Deeds or Land Registration Office
• details of the default (you defaulted because you did not make a payment or broke some other term of the mortgage)
• agreement(s) that might have changed your mortgage
• the total amount outstanding on the mortgage or amount unpaid, usually including the principal balance, interest, property taxes, legal fees and out-of-pocket expenses of the lender (protective disbursements)
• a Foreclosure Order, statement asking for foreclosure and sale of the property, if the total amount of the mortgage, interest and costs are not paid
• a statement asking for the court's permission (leave) to apply for a Deficiency Judgment to cover the balance of the loan, if the property is sold for less than what is owed to the mortgage lender.

The Statement of Claim may include a judgment against you for the amount of the outstanding debt, and a Foreclosure Order if that judgment debt is unpaid.

The lender is required to deliver (serve) the legal document to you in person. They may not just drop it off in your mailbox or courier it to you, unless the court permits them to serve in a different way (substituted service). However, a court generally only grants this if the lender can show they have tried all reasonable ways to serve you in person. It is not a good idea to evade personal service, as this will increase the lender’s legal costs, which will be added to your debt.

Once you are served the Notice of Action and Statement of Claim you may:

• contact the lender's lawyer to see if you can reach an agreement to avoid foreclosure. Depending on what the lender requires, this could include:
  • paying the arrears and costs
  • paying the entire principal debt, interest, costs and legal fees
• file a defence to the claim within the required time
• apply to court, to ask to have the foreclosure process discontinued
  within the required time.

You would need to pay all the arrears and legal costs. The right to have the foreclosure discontinued is only available once during the life of your mortgage.

The form and general instructions for filing a defence are on the Nova Scotia Courts website under How to Defend an Action on the Supreme Court – Court Forms page. Try to get legal advice if you want to file a defence. Contact a lawyer in private practice or, if available in your area, a Free Legal Clinic for people who are going to the Supreme Court without a lawyer.

If you disagree with what is in the Notice of Action and Statement of Claim, you can file a defence with the Supreme Court of Nova Scotia within the following time:

• 15 business days: if you are served in Nova Scotia
• 30 business days: if you are served outside of Nova Scotia but within Canada
• 45 business days: if you are served outside of Canada.

Business days do not include weekends and weekdays when the court is closed. The 15-day timeline applies to most circumstances, it is important not to miss the deadline.

If you choose to file a defence, it should include why you disagree with what is in the Notice of Action and Statement of Claim, and why you feel your property should not be foreclosed on.

Some examples of defences may include that you: 

• did not sign the mortgage 
• never got money from the lender
• repaid the lender
• have not broken any mortgage terms and you are not in default.

You must file your defence with the Supreme Court of Nova Scotia and personally serve a copy to the lender or their lawyer. The court will then give you a date to appear to dispute the lender’s foreclosure claim.

If you do not either file a defence or apply to the court for other relief, such as discontinuing the foreclosure, the lender will apply to a judge for a Foreclosure Order. This court application is called a motion and is usually done without notice to you (ex parte). The idea is that you already got the Notice of Action and Statement of Claim and chose not to participate by not filing a defence.

At the hearing for the lender’s motion for a Foreclosure Order, the judge can:

• ask for more information or better proof of the mortgage debt
• order that others be present before they hear the case
• direct the sale of the property by granting a Foreclosure Order.

If no defence is filed, usually only the plaintiff’s lawyer attends the foreclosure court hearing.

Maybe. Some possibilities are to: 

• negotiate
• redeem the mortgage
• reinstate the mortgage
• file a successful defence.

Negotiate: The easiest way is to negotiate with the lender. If you have missed payments, contact the lender and talk about your situation. The lender may be willing to give you time to catch up with payments by paying arrears and costs. You may be able to refinance so that you have lower mortgage payments over a longer term. Never ignore the lender’s letters or inquiries.

Redeem: You may redeem the mortgage by paying the full amount owing, including the interest, principal and any penalties or costs, before the sale of your property at public auction. This way, you keep the equity built up in your home.

Option 1: getting a new mortgage from a different lender to pay out the first mortgage. This can be difficult. Sometimes a mortgage broker can help. The Financial Consumer Agency of Canada has general information about mortgages that you might find useful. 

Option 2: selling your property before the auction for more than what is owed to the lender. If you have a Purchase Agreement for the sale of the property, you should provide a copy to the lender’s lawyer right away. Depending on the sale terms and the purchase price, the lender may choose to suspend the foreclosure process to allow you time to complete the sale.

Reinstate your mortgage: You have this right under a provincial law called the Judicature Act. Apply to the Supreme Court to discontinue the foreclosure and have the mortgage reinstated. This option can only be used once during the term of a mortgage.

If the default is non-payment of the mortgage, you will have to pay all the arrears and the lender’s legal costs (legal fees and out-of-pocket expenses). If the default is a breach of a promise (covenant), you will have to perform the promise and pay the lender’s legal costs.

You can apply to court to discontinue the foreclosure even if the lender is refusing to accept payments. However, you can only apply before the court has made a Foreclosure Order (see ‘What happens if I do not file a defence?’).

Defend the action: If you have a successful defence, the foreclosure process may be stopped.

Nova Scotia’s Judicature Act gives you the right to reinstate the mortgage and discontinue the foreclosure process by paying all outstanding arrears and costs owed to the lender or performing the covenant (promise) that is being broken. You can do this even if the lender refuses to accept payments. You have up until the court issues a Foreclosure Order.

You must apply to the Supreme Court of Nova Scotia. You should get legal advice and help with your application. Contact a lawyer in private practice, or there are Free Legal Clinics in Nova Scotia for people who are going to the Supreme Court without a lawyer.

This right is only available once per mortgage. The court has no power to discontinue if there is a second foreclosure proceeding under the same mortgage.

If the mortgage has been reinstated once before, the only way to stop the new process is through agreement with the lender or by paying the entire amount of the mortgage, plus interest, costs and their out-of-pocket expenses.

No, the lender can still foreclose if you are in default of the mortgage terms.

However, it may help you to declare bankruptcy on other debts so that you may focus on paying the mortgage. It may also help deal with any deficiency claim after sale at public auction. Talk to a licensed insolvency trustee about your financial situation and options. Go to the Bankruptcy page for more information, or contact the federal Superintendent of Bankruptcy.

After the court grants a Foreclosure Order, a court-appointed auctioneer or sheriff will sell the property at public auction.

The courthouse or justice centre in the local judicial district where the property is located holds the auction.

The lender (plaintiff) or their lawyer must:

• advertise the sale of the property in a newspaper approved by the court.
• publish at least two advertisements:
• the first at least 15 business days before the public auction
• the second within 7 business days of the public auction
• notify the property owner(s) and the borrower(s), if they are not the same person, of the sale date, time and place at least 15 days before the public auction. They can notify the borrower by regular mail.
• The auctioneer or sheriff holds the public auction at the time and place in the notice. If you wish to bid, you must go personally or send someone.

The successful bidder must pay 10% of the sale price at the end of the auction and then has 15 business days to pay the rest. As the successful bidder, if you have not paid the rest within the 15 business days, you will lose your 10% deposit. It will be applied against the auction costs and the debt. You cannot recover this money.

The 10% down payment at the auction rule is firm. If you are the highest bidder but do not have the full 10% in guaranteed form (cash, certified cheque or solicitor’s trust cheque) with you at the auction, your bid may be unsuccessful. The property will go to the next highest bidder.

The auctioneer or sheriff can allow the highest bidder a short amount of time, as little as 15 minutes, to get the funds but is not required to and may refuse. Therefore, success requires having the 10% available at the auction.

If the lender is the successful bidder, they may still ask for a Deficiency Judgment if there is a shortfall between the mortgage debt plus costs and the property’s net sale proceeds.

Yes. The property is sold to the highest bidder at a public auction.

Although unusual, if the lender has an offer to purchase the property from a third party, the lender may apply to the court for approval to sell the property privately. However, in most cases the property will be sold at a public auction.

Yes. You may try to sell the house up until the date of the public auction.

Deficiency: Following the sale, a lender (plaintiff) may apply to the court for a Deficiency Judgment against the borrower for the difference between the amount owing on the mortgage (plus interest, costs, out-of-pocket expenses, sheriff fees, property taxes), and the amount received from the property sale.

The lender must show that the amount obtained from the sale reflects fair market price. This is determined by actual sale price or through an appraisal.

The borrower and anyone else who may have to pay the deficiency amount will get at least 10 days’ notice of the Deficiency Hearing. The plaintiff has 6 months to apply for a Deficiency Judgment, from the date of the public auction.

If the property sale at public auction brings in more money than the amount owed to the plaintiff, the auction costs and outstanding taxes, the auctioneer or sheriff pays the surplus into the Court. Any party involved with the foreclosure, including the borrower, may apply to the Court to receive the surplus – but they must file an affidavit (sworn document) to prove they are entitled to it and have priority for the claim. The Court may then order the surplus be distributed to those entitled.

You should try to get legal advice if you wish to claim the surplus.

The court has the power to overturn the public auction in exceptional cases. An example would be if the directions in the Foreclosure Order were not followed.

If no Defence is filed and the lender goes through the normal steps, it normally takes 2 to 3 months from the filing of the Notice of Action and Statement of Claim to the conclusion of the public auction sale. It may take longer, depending on the court schedule and other factors.

The 2 to 3 months consists of:

1. Issuance and service of the Notice of Action and Statement of Claim.
2. The 15 business days to file a Defence after being served the Notice of Action (longer if you are served outside of Nova Scotia, as set out above).
3. If no Defence is filed, the lender can schedule the Motion to court for a Foreclosure Order with 4 business days’ notice.
4. The 15 business days’ for required newspaper advertisements and notices following the issuance of the Foreclosure Order.
5. The 15 business day time limit for the successful bidder to pay the full purchase price.

The days are business days, so weekends and weekdays when the court is closed are not included. The rest of the time involved will depend on how quickly the lender decides to proceed, and other factors such as the time required for service.

If a Defence is filed, the above timeline can vary a lot. The lender may make a motion to court for Summary Judgment, and how long things will take will depend on the contents of the Defence, as well as the court schedule.

When the lender sends the notice of sale at public auction to the homeowner, they usually advise that the homeowner must vacate (leave vacating the premises on or before the public auction date.

If you are a homeowner, you must leave the property once the successful bidder completes the purchase, unless the new owner says you don’t have to move.

The Foreclosure Order enables the lender to ask the sheriff to deliver possession of the property to the new owner. This means the lender may require you leave as soon as the Foreclosure Order has been issued (made), although this would be unusual.

Once the property has been sold at public auction, you may ask the new owner for permission to stay in the property. However, they have no obligation to let you stay and you should be prepared to move out on the public auction date. 

If you are a tenant, how soon you move out depends on the type of tenancy you are in and on what the purchaser intends to do with the property.

If you are a residential tenant (renting) you must be given notice according to the Residential Tenancies Act (the earlier of 3 months or the expiry of the lease under any written lease agreement – such as a fixed term lease). For more information you can contact Residential Tenancies by calling 902-424-5200 or 1-800-670-4357, or by attending your nearest Access Nova Scotia location. 

If you are a commercial tenant (rent for a business) you must move out the day of the foreclosure sale, unless the new owner tells you otherwise.

The successful bidder becomes the owner of the property once the full purchase price has been paid and they get the deed. The foreclosure is complete once the Confirmatory Order is granted.

Once the property is sold the auctioneer or sheriff files a Report with the court. The Report states that the property has been sold, the name of the successful bidder, the purchase price, how the money was distributed and that a property deed was delivered to the successful bidder.

Once the Report is filed, the lender will apply for an Order Confirming Sale. This Order states the public auction has taken place and the foreclosure process is complete.

The lender must also file an affidavit (usually prepared by their lawyer) confirming that the advertisements were placed and the notices were sent out, meeting the Foreclosure Order requirements.

Make contact with the lender and a lawyer

• Your lender: read your mortgage document carefully and talk with your lender about options you may have if you are having financial problems.
• A lawyer: try to talk with a lawyer in private practice if you are not sure about what to do. Here are some ways to find a lawyer.

Nova Scotia Legal Aid does not generally deal with foreclosures, although you should contact them directly to see if they can help in your situation. Visit nslegalaid.ca or look under 'Legal Aid' or 'Nova Scotia Legal Aid' in the telephone directory.

There is also a Free Legal Clinic in Halifax, Sydney, Yarmouth and Truro for people who are going to Supreme Court without a lawyer.

• information about the foreclosure process:
  • Nova Scotia’s Civil Procedure Rules (court rules and forms that apply in the Supreme Court of Nova Scotia)
  • Supreme Court of Nova Scotia, Practice Memorandum - Foreclosure Procedures
  • Nova Scotia's Judicature Act.
    
    
• A trustee in bankruptcy, also called a Licensed Insolvency Trustee can provide professional advice about your debt options. Trustees are listed in the Yellow Pages under 'Bankruptcies', or search for 'trustee in bankruptcy' online. You can also get a listing of local trustees from the Office of the Superintendent of Bankruptcy at 1 877 376-9902 (toll free) or osb.ic.gc.ca.
  
  
• Office of the Superintendent of Bankruptcy which regulates bankruptcies, oversees and licenses trustees in bankruptcy (licensed insolvency trustees), and has helpful general information for debtors and creditors. Website  www.osb.ic.gc.ca
  Industry Canada
  Phone: 1 877 376-9902 (toll free).

• A credit counselling agency. Credit counsellors cannot administer bankruptcies or consumer proposals, but can help you with things such as a debt or general money management plan, budgeting, wise credit use.
  
  
• The Financial Consumer Agency of Canada has information about how to find a reputable Credit Counselling service: www.fcac-acfc.gc.ca or call 1 866 461-3222. Lots of consumer information on many financial topics.

• University of King's Investigative Workshop, "Foreclosed",July 2019, news article about the Foreclosure process in Nova Scotia.

Businesses are not allowed to issue or sell a gift card that has an expiry date. You can redeem the gift card as if it has no expiry date.

There are some exceptions. Expiry dates are allowed on gift cards:

• designed for charitable, marketing, advertising or promotional purposes;
• for a good or service, such as a haircut or spa treatment, if the gift card was issued before February 1, 2010 and has no dollar value on it.

However, the gift card rules do not apply to prepaid telephone cards or prepaid credit cards such as Visa or Mastercard.

Also, if the company goes bankrupt, the bankruptcy process may result in an expiry date for the company's gift cards. 

Businesses are not allowed to charge service fees for gift cards. If you are charged a service fee for a gift card you can demand a fee refund. Your refund request must be in writing. The business must refund the fee within 15 days of your request.

Businesses are allowed to charge a fee to replace a lost or stolen card, or to customize a gift card. A fee is also allowed if the gift card is for a charitable purpose, or for marketing, advertising, or promotion.

When you buy a gift card a business must provide written information to you about:

• how to use or replace the gift card;
• any rules that apply to the gift card;
• any fees or expiry date;
• who to contact for information about the card, including your card balance, and how to contact them;
• any return policy for items purchased using the gift card.

Make sure you understand all the card's terms and conditions when you buy it, including any rules about refunds, returns or exchanges.

For more information consumers or businesses can contact Service Nova Scotia at www.novascotiagiftcards.ca, or call 1 800 670-4357.

For further information on consumer protection generally visit Canada's Office of Consumer Affairs (OCA) through Industry Canada at www.ic.gc.ca.

 Your gym membership contract must be in writing, and it must include the following:

• Your name and address;
• the name and address of the business;
• a clear description of what services you will get;
• the price of the services; and
• rules for renewing or cancelling the contract.

If you are paying by installments, the contract must tell you the number of payments you have to make, the amount of each payment, and any additional cost for paying by installments.

If any of the services are not available when you sign the contract, then the contract must give the date when services will be available.

Read the contract very carefully, and make sure you understand it before you sign.

Yes. A gym can charge an initiation fee on top of the membership fee. However, your gym cannot charge you more than one initiation fee, or charge an initiation fee that is more than double the membership fee.

Yes. A gym must offer you the option of paying membership fees and any initiation fee in monthly payments over the contract term.

If you pay by instalments the gym is allowed to charge you up to 25 percent more than the total would be if you paid up front. The contract must include the number of payments you have to make, the amount of each payment, and any additional cost for paying by instalments.

Yes. There is a 5-day cooling-off period. This gives you a chance to try out the facilities at the gym or fitness club, and change your mind about joining if you decide it is not right for you.

You can cancel a gym membership contract within 5 days of signing the contract, or within 5 days of the services becoming available, whichever is later. You do not have to give a reason for cancelling. You must cancel the contract in writing. You may want to deliver the written notice of cancellation in person, and get a signature proving receipt, or send it by registered mail. Registered mail is a good idea as you will have proof that it was delivered. Keep a copy of the proof of cancellation.

If you cancel within the 5-day cooling-off period you are entitled to a refund of any money you paid. The gym must refund your money within 20 days of cancellation of the contract.

Your contract may be renewed automatically if the gym follows certain rules.

The gym must send you a written reminder that the gym has a right to renew your contract automatically if you do not respond to the renewal notice. They must send the renewal notice at least 30 days, but not more than 90 days, before the end of the contract.

Do not ignore the renewal notice. If you get a renewal notice you must notify the gym in writing if you do not want to renew the contract. You must notify the gym before the contract ends. You may want to deliver your notice of non-renewal in person, and get a signature proving receipt, or send it by registered mail. Keep a copy for your records.

Service Nova Scotia helps resolve consumer issues, and administers the Consumer Protection Act. Contact Service Nova Scotia at 902-424-5200 or 1 800 670-4357, or visit Service Nova Scotia online.

For further information on consumer issues visit Canada’s Office of Consumer Affairs (OCA) at www.ic.gc.ca

A payday loan is a loan of $1500 or less. The average payday loan in Nova Scotia is about $487.   The money is borrowed for short periods, from a few days to a few weeks. The loan term cannot be more than 62 days.  Privately owned companies offer payday loans in stores and online.

To get a payday loan, you usually give the lender:

• a cheque to cover the loan plus fees, postdated to your next payday; or,
• permission to take the total amount owing out of your bank account on your next payday (this is called pre-authorized debit).

In Nova Scotia, the most a payday lender can charge is $17 for every $100 you borrow, as long as you pay the loan back on time. This is called the maximum 'total cost of borrowing'.  

Your total cost of borrowing is the total amount the loan will cost you if you repay the loan on time.

The cost of borrowing includes:

• interest
• administration fees
• commissions
• cheque cashing fees
• pre-authorized debit fees
• fees for issuing or loading a cash card
• cash card transaction fees
• agent or broker fees.

Whether they are called fees, commission, interest or something else, it all adds to the total amount the loan will cost you.

As of December 1, 2023, the maximum cost of borrowing cannot be more than $17 for every $100 you borrow. 

For example, if you borrow $300, a payday lender cannot charge you more than $51 as the total cost of borrowing. In this example, the most you would be required to repay is $351 if you repay the loan on time. If you do not repay the loan on time, you will be charged interest on the amount you still owe. They can charge you up to 30% interest (annual interest rate) if you pay late. In addition, they can charge a default penalty of up to $40. 

Payday lenders must have a poster in their store or online, giving an example of the total cost of borrowing, like the table below: 

PAYDAY LOANS ARE HIGH-COST LOANS

Example:	$300 loan for 14 days
Principal amount:	$300
Total Cost of borrowing:	$51
Total to repay:	$300 plus $51 = $351
Annual Percentage Rate:	APR = 443.21%

Payday lenders are regulated and licensed by Service Nova Scotia to offer, arrange or give payday loans in Nova Scotia. Lenders must follow the Consumer Protection Act rules and regulations to get, keep or renew a license. They must renew their license every year. Internet payday lenders are also regulated in Nova Scotia and must have a permit from Service Nova Scotia to arrange or provide payday loans online in Nova Scotia.

In certain situations, Service Nova Scotia may refuse to give or renew a license or may suspend or cancel a license.

Call Service Nova Scotia at 1 800-670-4357 or 902-424-5200, or check the Nova Scotia government's online list of licensed payday lenders to find out whether a particular payday lender is licensed to operate here.

Be extra careful with online payday lenders!  Many aren't licensed, aren't located in Canada, and don't follow provincial rules that aim to protect borrowers. You should only use licensed online payday lenders who are located in Canada.

A payday lender must give you the following information:

• the lender's contact information
• contact information for Service Nova Scotia
• the date the loan is made
• the total amount of money you are borrowing
• the total amount you must repay, and when it is due
• if you are paying by instalments, the amount of and due dates of each payment
• details of any fees, charges, commissions, interest, penalties for the loan
• your total cost of borrowing, including interest and other fees
• the maximum cost of borrowing allowed ($17 per $100)
• the annual percentage rate ('APR')
• the interest payable as a percentage rate
• charges you would have to pay if the loan is not repaid by the due date, including the maximum charge allowed ($40 per loan, maximum interest on outstanding balance is 30%)
• any interest payable for extending or renewing the loan
• your rights if the payday lender charges more than they are allowed to charge
• how to cancel your payday loan, including the form to use to cancel
• a copy of your loan agreement.

The information must be clear, easy to understand, and in writing.

You and the lender must both sign your loan agreement. Read it carefully before you sign.

If you get a cash card, the lender must give you the card terms and conditions in writing, including the amount of credit on the cash card and any card expiry date or extra charges for using the card at a place other than the payday lender.

A cooling-off period is an automatic cancellation period where you may reconsider your decision and cancel the contract for any reason without penalty.

Storefront location payday loan:

There is a one-day cooling-off period after signing a payday loan agreement. You may cancel a payday loan any time before the end of business on the day after you get the money or could access the money. This means the next business day. For example, if you get the money on a Friday and the business is closed until Monday, you would have until the end of business on Monday to cancel the loan.

Online payday loan:

You may cancel an online payday loan within 48 hours after you get access to the money.

There is no penalty for cancelling a payday loan within the cooling-off period, and you do not have to give a reason for cancelling.

You may cancel the loan during the cooling-off period without giving a reason and without penalty.

You may also cancel at any time if:

• you were not told about your cancellation rights
• you were not given all of the information the lender is required to give you (see 'Information the lender must give you').

You must cancel the loan in writing and repay any money owed. The lender should have given you a form to use to cancel. You may use that form to cancel the loan or give your own written notice to the lender saying you are cancelling the loan. Delivering it in person and keeping a copy for your records is best.

A payday lender cannot charge a cancellation fee.

Once you cancel the loan in writing and repay any money owing or return an unused cheque or cash card, the payday lender must give you a receipt to confirm that the loan has been cancelled.

If you agree to buy insurance on the loan, and the lender pays the premium, you will also need to pay the pro-rated amount of the insurance premium.

You can repay the full amount of the loan any time before it is due.

A payday lender cannot charge a fee or penalty for early repayment. If a payday lender charges you a fee for early repayment, you can have that fee refunded. Contact Service Nova Scotia if you were charged a fee or penalty for early repayment.

If you have not paid back everything you owe by the due date, you and the payday lender can make a deal to extend or renew the loan, as long as you are only charged interest. A payday lender can charge interest on an extended or renewed loan but cannot add other fees or charges.

 A lender cannot:

• require you to buy insurance to get a loan
• require security for a payday loan (for example, make you sign an agreement that says they can take your car if you can't repay the loan)
• require undated or post-dated cheques for more than you would owe on the due date for repayment, including interest and fees
• give you a new payday loan if you already owe money to them
• set the due date for repayment before your next payday
• charge a penalty or fee if you repay the loan early. You have a right to a refund if you are charged extra for early repayment
• require a wage or other income assignment (for example, make you sign an agreement that says your employer can deduct money from your pay and give it to the lender if you can't repay the loan)
• grant rollovers. A rollover is a second payday loan to pay out an original payday loan which you can't pay or an extension or renewal of your payday loan that adds extra fees or charges other than interest. Extensions or renewals that only charge interest are allowed.

Contact Service Nova Scotia for more information or to make a complaint.

If you cannot repay the loan when it is due, you are in default. 

If you pay late, payday lenders can charge you:
up to 30% interest (annual interest rate) and up to a $40 late payment penalty

If you don't pay back the loan when it is due:

• you will be charged interest on the amount you still owe, including the fees, and this interest will continue to build up. The interest rate will be the amount specified in your loan agreement for default, up to a maximum of 30%
• in addition to the interest, you may be charged a default penalty (fee) of up to $40 
• the payday lender could sell the loan to a collection agency
• the debt could appear on your credit report
• the payday lender could sue you for the debt
• the payday lender could seize your property, if they successfully sue you
• the payday lender could take money from your paycheques (also called garnishing your wages) if they successfully sue you

A payday lender has the right to sue you for the amount you owe, plus interest and any court fees. You should try to speak to a lawyer if you are being sued.  Getting some money management help from a credit counsellor or licensed insolvency trustee is also a good idea.

The payday lender must follow the Consumer Protection Act and Consumer Creditors' Conduct Act rules when trying to collect money from you.

A payday lender cannot:

• make collect calls to you
• contact you if you have written telling them to contact your lawyer
• use documents, notices or letters which are made to look like court forms
• pretend to represent the police or sheriff
• threaten you or use abusive or intimidating language
• harass you or your family, for example, by calling every 15 minutes
• try to collect the debt on a Sunday or any day before 8:00 am or after 9:00 pm
• give misleading or false information to anyone about you, including your employer
• threaten or try to make things difficult for you at work or any of your family members' workplaces
• ask you for or require you to enter into a wage assignment or an assignment of any other kind of income. A wage assignment is a deduction from your paycheque, with the money deducted going directly to the lender.

• If you have questions or a complaint about a payday lender, contact Service Nova Scotia.  Phone: (902) 424-5200 or 1 800 670-4357 (toll-free)
  Website: Service Nova Scotia
• Nova Scotia Utility and Review Board decisions about payday loans: uarb.novascotia.ca, and 2022 decision on payday loans
• Consumer Protection Act and payday lender regulations
• The Financial Consumer Agency of Canada has general information about Payday Loans, debt management help, and about how to find a reputable credit counselling service.
• A financial advisor, credit counsellor, or a licensed insolvency trustee. 
• The Office of the Superintendent of Bankruptcy has information about options you can trust to help you with your debt.

A seller means a person whose business involves selling goods or services online.  

Before entering an internet sales contract, the seller must give you a very clear opportunity to accept or decline the contract.  

A seller must also give you the following information:

• the seller’s contact information, including name, address, telephone number, and, if available, e-mail and fax number;
• an accurate description of what you are buying;
• a price list, including taxes and shipping charges, and details of any extra charges;
• the total amount you have to pay, or, if you are buying the goods over time, the amount of each payment;
• how payments will be made, and in what currency; 
• the delivery date for goods or the start date for services; 
• details about how and where delivery will happen, who will deliver the goods, who will pay for delivery
• any cancellation, exchange and refund policies; and 
• any other contract restrictions, limitations or conditions.

A seller is considered to have given you this information if it is displayed in a clear and understandable way, and you can save or print the information.

The contract must have the information outlined above, as well as your name (or customer number/other identifier) and the date the contract was entered into.

A seller must give you a copy of the internet sales contract within 15 days of entering into it.  A seller can give you a copy by e-mail, fax, regular mail, or in some other way so that it is clear you got a copy. 

If you do not get a copy of the contract, you can cancel the contract within 30 days of entering into it.

Yes, in certain circumstances:

1.    If the seller did not give you the information they are required to provide (outlined above under Information the Seller must give you) or did not give you a chance to accept or decline the contract before entering into it, you can cancel the contract at any time up to 7 days after you get a copy of the contract.

2.    If you do not get a copy of the contract, you can cancel the contract within 30 days of entering into it.

3.    You can cancel the contract any time before the delivery of the goods or start of services if the contract has a specific delivery or service start date and

• the seller does not deliver the goods within 30 days of the delivery date in the contract or another date you and the supplier agreed to in writing or electronically; or
• the services are for travel, transportation or accommodation, and the seller does not start the services on the date in the contract or another date you and the supplier agreed to in writing or electronically.

4.  You can cancel the contract at any time before the delivery of the goods if there is no delivery or services start date in the contract and the seller does not deliver the goods or start services within 30 days after the contract was entered into.

For an internet sales contract, a seller is still considered to have delivered goods or started services if they try to deliver them:

• and you refuse to accept the goods or service; or
• no one is at your home to accept delivery or allow service start up, even though you were given reasonable notice.

You can notify the seller in any way that makes it clear you are cancelling the contract.  For example, you can cancel the contract in person, by registered mail, telephone, courier, fax or e-mail.  It is a good idea to cancel the contract in writing so that you have a record and keep a copy to prove it.

Cancelling an internet sales contract means it is as if the contract never existed, as long as you are cancelling for a good legal reason, like the reasons listed under 'Can I cancel an internet sales contract without penalty?'

Once a contract is cancelled:

• the seller has 15 days to refund any money you paid; and
• you must return any goods you got within 15 days of cancelling the contract or within 15 days of delivery, whichever is later.  The goods must be unused and in the same condition as when you got them.

If the seller feels it is unfair for you to cancel the contract (for example, feels that you did not follow the terms of the contract), the seller can take you to court.

a)    Reversing a credit card charge
If you paid by credit card and the seller does not refund your money within 15 days of cancelling the contract, you can ask your credit card company to cancel or reverse the credit card charge.  Your request must be in writing and must include the following information:

• your name, credit card number, and card expiry date;
• the seller’s name;
• the date you entered into the internet sales contract; 
• the amount charged to your credit card;
• a description of the goods or services; 
• the reason you cancelled the contract; and
• how and when you cancelled the contract.

Your credit card company may require you to sign a sworn document (affidavit) to prove your request.

Once you provide the required information, your credit card company must cancel or reverse the credit card charge, including any interest, within 2 complete billing periods, or 90 days, whichever comes first.

b)    If you cancel the contract and don’t get your money back within 15 days, you can take the seller to court.  You may want to talk with a lawyer if you are considering going to court to get your money back.

Nova Scotia’s Consumer Protection Act does not cover internet sales if:

• you download or access online goods or services immediately, or
• the goods or services cost less than $50.

When shopping online, be careful of online shopping scams. Make sure that you are dealing with a reliable and legitimate online vendor. Check for the vendor's physical location and contact information, such as address, email address and telephone number, and look for links to legitimate consumer reviews. Read the terms of sale, shipping, complaints, return and exchange policies. Before you check out, look for red flags like spelling mistakes and suspicious URLs.

Determining if you’re buying directly from the retailer or a third-party seller is important. 

A third-party seller is an independent vendor who sells their consumer products on an online marketplace. They usually use keywords like “sold by”, “shipped by” or “fulfilled by” near product descriptions. You can also look for sections of the retailers’ website labelled “marketplace” or featuring a list of “partners”.

The third-party seller will usually be responsible for setting item prices, handling order fulfillment and consumer service issues, including returns, even though you are buying from a different retailer’s website. In addition, the third-party seller may be responsible for shipping-related matters, including delivery. This is important to know in advance if you run into a shipping or return issue.

Service Nova Scotia administers the Consumer Protection Act, and deals with consumer complaints.You can contact Service Nova Scotia at 902-424-5200 or 1 800 670-4357, or go to Service Nova Scotia online.  

Finally, you’ll find tips for protecting your privacy and avoiding scams when shopping online at:

• Canadian Consumer Information Gateway - getcybersafe.gc.ca/
• Financial Consumer Agency of Canada - fcac-acfc.gc.ca
• Consumer Affairs Canada - ic.gc.ca