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Debt Collection - Old Debts

Do I have to pay an old debt?
If a debt collector has asked you to pay a debt that is more than six years old (or 3 years in the Northern Territory) it is important to know your rights.

Old Debts

You may not have to pay an old debt if you made your last payment more than 6 years ago (or 3 years ago in the Northern Territory). This is called a statute barred debt. If a debt is statute barred it means you have a defence if someone commences legal action against you to recover the debt.

01

Is the debt statute barred?

A debt might be statute barred if any of the following has not occurred in the past 6 years (or 3 years for the Northern Territory):

  • You have not made a payment
  • You have not acknowledged the debt in writing
  • No court judgment has been entered against you

Different rules apply for debt secured by a mortgage over real property (for example, a home loan). Ring us if you are being debt collected for an old mortgage debt.

Table of limitation periods by State or Territory

State/Territory

Limitation period

Australian Capital Territory

6 years

New South Wales

6 years

Northern Territory

3 years

Queensland

6 years

South Australia

6 years

Tasmania

6 years

Victoria

6 years

Western Australia

6 years

 

How do you check if there is a court judgment?

You can find out if a court judgment has been entered against you by:

  • Contacting your local court or magistrates court
  • Asking for details of the court judgment from the debt collector and then checking with the court
  • Getting your credit report. See Get your credit report.
02

What to do if a debt collector says you have to pay an old debt

If you think it might be more than 6 years (or 3 years for Northern Territory) since you last made a payment or acknowledged the debt in writing then:

  • Do not make a payment
  • Do not agree you owe the debt (refer to the debt as the “alleged” debt)
  • Do ask the debt collector to provide copies of the contract and the account statements
  • Do ask the debt collector if they have a court judgment. If they do ask for details including court number, date obtained, which court and the amount of the judgment. Check with the Court that the judgment has been obtained.
  • Do keep notes of all phone conversations and any letters/emails received or sent.
  • Get advice by calling us on 1800 007 007.

How to request documents

You have a right to request copies of the documents that the debt collector is relying on to show you owe a debt.

You can use this letter template to request documents so you can check if the debt may be statute barred.

Depending on the debt being claimed you may need to request other documents. Call us on 1800 007 007 if you need help with this.

03

What if I believe the debt is statute barred and the debt collector does not agree?

What if I believe the debt is statute barred and the debt collector does not agree?

The debt collector should explain why it does not agree the debt is statute barred. Ring us to get some advice as to whether the debt may be statute barred.

You can have the decision of the debt collector reviewed through external dispute resolution in most cases. You can do this for free if the debt collector is a member of an External Dispute Resolution Scheme (EDR).

Refer to Dispute Resolution.

If the debt collector does agree the debt is statute barred

Make sure you have it in writing from the debt collector. If you do not have it in writing put it in writing to the debt collector. Say “I confirm that you have agreed the alleged debt is statute barred.”

04

What if the debt collector is threatening legal action or has commenced legal action?

If the debt is statute barred you have a complete defence to the debt claimed. You should immediately:

  1. Lodge a dispute in EDR (if the debt collector is a member). The EDR will then decide the dispute; or
  2. Call us to get a referral for legal advice to seek assistance to lodge a defence in court (if the debt collector is not a member of EDR).
05

What do I do if the debt collector has a court judgment?

A court judgment means that the court has decided you owe the debt. The court judgment may be able to be set aside in certain circumstances, for example, you did not know about the court proceedings and you had a defence (a reason why you did not owe part of all of the debt). A defence could be that the debt was already statute barred before the debt collector commenced court proceedings.

Court judgments can also become “old”. This means that the debt collector can no longer enforce the debt. This means they cannot send the sheriff to take goods, garnishee wages, examine your financial situation in court or make you bankrupt. In certain circumstances the court can extend these limitations so get legal advice.

Table of limitation periods by State or Territory

State/Territory

Limitation period for court judgments

Australian Capital Territory

12 years

New South Wales

12 years

Northern Territory

12 years

Queensland

12 years

South Australia

15 years

Tasmania

12 years

Victoria

15 years

Western Australia

12 years