Debt collection

Your creditors have rights. If you miss a payment on a bill or loan, your creditor may come to collect the debt. A debt can be collected by either the original creditor or a debt collection company acting on behalf of them. Your debt can also be sold by the creditor to another debt collection company who then has the right to pursue the debt. Read more about creditors' rights on this page.

While debt collection is legal, bullying and harassment is not. Importantly, you also have the right to apply for a repayment arrangement you can afford if you are in financial hardship.

Old Debts

If you are being asked to repay debts more than six years old, find out about your rights and whether you have to repay the debt. Read More

What to do if you owe the debt


Work out what you can afford to pay

If you're struggling to pay back money you owe, the first thing to do is to work out what you can actually afford to pay by doing a simple budget. How to work out what you can afford to pay.

If you can afford to pay something
Start paying the amount you can afford and get in touch with your creditor straight away to put a repayment agreement in place.

If you can't afford to pay anything
Call us on 1800 007 007 straight away for advice.


Work out a payment plan with the debt collector

If a debt collector is pursuing you for outstanding debt, your options are:

  • Make a repayment arrangement that you can afford (based on Step 1). Debt collectors must reasonably consider requests for a repayment arrangement if you're in financial hardship.
  • Offer to pay a lump sum that is a percentage of the debt as full and final settlement. Use this letter template
  • Offer to pay the debt in full as final settlement
  • Ask for the debt to be waived if you have no significant assets, are on a low income and can't pay for the foreseeable future

Get any arrangement confirmed in writing and make sure you keep to the arrangement.


If the debt collector won't agree to a payment plan

The debt collector shouldn't refuse reasonable repayment arrangements. If they do, contest the decision through external dispute resolution. You can do this for free if the debt collector is a member of an External Dispute Resolution (EDR) scheme.

Refer to Dispute resolution.


Utiliy IconIf a debt collector is harassing you

  • Write to the debt collector and ask them to stop the harassment and to only contact you by phone or letter. Use this letter template (Word 107kb)
  • Keep detailed records of what the debt collector is doing. Note down the name of any person you speak to, the date and the time, a brief description of what happened and the names of any witnesses
  • Keep all communication, including letters and text messages

Speak to one of our financial counsellors

If your problem still hasn't been solved, or you're feeling overwhelmed, call us on 1800 007 007 to speak with one of our financial counsellors.

What to do if you want to dispute the debt


Contact the debt collector

Contact the debt collector and tell them you are disputing that you owe all or part of the debt and explain why.

If the debt collector is threatening legal proceedings and you need time get advice, you can use this sample letter to request a delay in debt enforcement action.

Utiliy IconGrounds for disputing a debt are:

  • You don't owe all or part of the debt
  • The debt isn't yours
  • The debt is too old to be collected (it has been more than 6 years, or 3 years in the NT, since your last payment) and a court judgment hasn't been obtained against you. This means it is 'statute barred'). See Debt collection - old debts for more information.
  • You have rights under consumer protection laws; for example, there was a breach of the responsible lending laws when the loan was granted.

If the debt is not resolved, dispute it

Lodge a dispute if the debt collector or creditor is a member of an External Dispute Resolution (EDR) scheme. Refer to Dispute resolution.

Your creditor's rights

Creditors have rights under the law and as a result of the contract you have with them. These rights allow your creditor to pursue you for money you owe them.

Your creditor’s rights

They can take action to recover their money by following a lawful process. They may:

  • send you a default notice. When the loan is for personal purposes or to buy an investment property a default notice must be sent (giving at least 30 days to pay) before further action is taken;
  • accelerate the debt. This means the entire debt becomes due and payable. For loans for personal purposes or to buy an investment property, a default notice must have been sent and the time given in which to pay the debt must have expired.
  • seize any property they have secured - including repossessing your home. The creditor cannot take property that is not security for the loan unless they obtain a court order;
  • evict you from rented premises if they are your landlord. Notice is usually required before eviction;
  • disconnect your gas or electricity if they are your utility provider. A notice must be sent before disconnection;
  • disconnect your phone if they are your service provider. A notice must be sent before disconnection;
  • take you to court. You must be sent a summons or statement of claim and be given the opportunity to file a defence.


Our tips

  • Act quickly and get legal advice
  • If you believe you do not owe part or all of the debt, get legal advice
  • Making a repayment arrangement can often stop the creditor taking any of the above actions
  • External Dispute Resolution (if available) may help if the creditor will not agree to the payment plan you are offering

What if?

I don't pay the debt

If you don't pay, enforcement action may be taken against you.

Any court judgment made against you will be listed on your credit report for five years from the date of judgment.

In this situation, you can also apply for voluntary bankruptcy. If you're considering this, please contact us on 1800 007 007 and speak with one of our financial counsellors.

I've already paid the debt

If a debt collector contacts you about a debt that you've already paid in full, explain the situation in writing and include copies of any records you have that prove the debt has been settled.

I receive a letter of demand

A letter of demand comes from your creditor or debt collector and usually warns that if you don’t pay the debt within a certain time period they'll sue you in court. Although letters of demand aren't court documents, they are often the last letter a creditor will send you before suing you.

I've experienced harassment

In some circumstances, you can claim financial loss (such as lost wages) or non-financial loss (such as distress, humiliation, stress and inconvenience) if a creditor or debt collector engages in unlawful debt collection practices.

You can seek compensation:

  • By lodging a dispute in external dispute resolution if the debt collector or creditor is a member of an External Dispute Resolution (EDR) scheme. Refer to Dispute resolution.
  • In a court or tribunal.

Know your rights
What debt collectors can and can't do

Debt collectors are only allowed to phone or meet you face-to-face between 7:30am and 9pm on weekdays, and 9am to 9pm on weekends.

Debt collectors are only allowed to phone or meet you face to face between 7:30am and 9pm on weekdays, and 9am to 9pm on weekends.

They can only visit your home (or another agreed location) as a last resort when other methods of contact have failed.

Providing they do so lawfully, creditors and debt collectors can:

  • write to you or ring you and demand payment
  • make arrangements for repayment
  • find out why an agreed repayment plan has not been met
  • review a repayment plan after an agreed period of time
  • inspect or recover mortgaged goods (if they have a right to do so)
  • take you to court to recover their money if they follow the correct procedures
  • get an order from a court to take some of your property
  • sell the debt to a debt collection company, which has the same power to enforce the debt as the original creditor

Creditors and debt collectors can't:

  • have you sent to prison
  • take or sell any of your property that they don’t hold security over, unless they have an order from the court
  • tell you to access your superannuation or get a loan to pay the debt
  • demand a lump sum payment from you before considering a repayment arrangement.
  • act in a way that is misleading or deceptive
  • reveal information about your financial situation to others
  • contact you by email, phone or letter more than three times a week
  • threaten, physically intimidate, or harass you

If you feel you're being harassed, please call us on 1800 007 007 and speak to one of our financial counsellors.

Debt collection guideline for collectors & creditors
Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) have jointly produced this guideline to assist creditors, collectors and debtors understand their rights and obligations, and ensure that debt collection activity is undertaken in a way that is consistent with consumer protection laws.

Know your rights
Government regulators

You have a right to complain to Government regulators ASIC (for debts relating to financial services) or ACCC (for debts in relation to other products and services).

You can complain to:

Some State and Territory governments also regulate debt collectors. Links to further information appears below. If you want to make a complaint contact your consumer affairs or fair trading office in your State or Territory.

There are two main benefits of complaining to a regulator:

  • It can help the regulator take action to stop unfair practices and lead to improved behaviour by debt collectors and creditors in the future
  • If you send a copy of your complaint to the creditor (or debt collector) it sometimes encourages them to resolve your complaint.