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Help with Debt Collectors

Debt collection agencies try to recover unpaid bills or loan payments on behalf of credit or service providers. Information about your rights regarding debt collectors can be found here.

Sometimes the debt may be quite old or outsourced to an unfamiliar company, so it's important to clarify exactly what the account relates to and that it is an amount you actually owe.

In some cases the collection agent may not be able to provide you with details of how the figure was arrived at. If you have concerns the debt is incorrect and higher than it should be, you may have grounds to dispute it and force them to provide the evidence. However in many cases the debt collector will settle for a much lower amount.

The age of the debt is important - if it has been more than 6 years since any contact, the debt may be statute barred (unable to be collected), unless judgement has been obtained.

Do You really owe the debt?

  • Mistaken identity?

    The debt may belong to another person with the same name.

  • Was it your partner's debt?

    It could be the debt of a former partner – but if you signed as co-borrower or guarantor, then you are equally responsible for the debt. See the Guarantor page.

  • Is the debt too old?

    In some cases old debts (at least six years old) can no longer be collected unless the matter has gone to Court.

  • Was it an unjust contract?

    A Court may cancel or reduce a debt if your financial position meant you should never have been offered it. Contact the Financial ombudsman to investigate and halt any legal action.

If it is a genuine debt....

  • Do you disagree with the amount owing?

    Request an itemised statement detailing:

    • how the amount has been calculated
    • details of any payments made, plus charges, fees and interest.
  • You can offer to pay the debt in instalments

    But only commit to payments you can afford.

  • Offer a reduced sum to settle the debt

    Debt collectors might accept a reduced amount and write off the balance without further action, but get agreement in writing before paying the debt collector.

  • Is Centrelink your only income?

    If your only income is Centrelink benefits and you own no significant assets, then your income is protected and can’t be taken from you to pay a credit provider or debt collector.

  • You could be taken to Court and made Bankrupt

    While Bankruptcy itself may not necessarily be a bad thing for some people, it is best avoided if you have significant assets which can be taken from you and sold (including your home).

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