Bankruptcy in Australia – What To Know About Debt Collection

Bankruptcy in Australia - What To Understand about Debt Collection 1

Bankruptcy in Australia – What To Know About Debt Collection


Many individuals deal with financial difficulties at some time in their lives, and most of these people are probably familiar with debt collectors. A debt collector is an individual whose job is to collect debts on behalf of a firm. A debt collector can either be an employee of an organisation you owe money to, or they can be a 3rd party servicing a lender. As you can envision, it’s not an easy task to squeeze money out of people who simply don’t have any. It would be fair to say that many people in debt are already strained about their financial difficulties, and other people phoning them to remind them of this doesn’t always end well. As a result, debt collectors have a lot of adverse connotations. There have been a large number of cases of individuals being harassed by debt collectors so it’s imperative that people who are being contacted by debt collectors understand their rights and how to handle these types of interactions.


Learn about Your Legal Rights.

Understanding what debt collectors can and can’t do is vital in having the capacity to suitably manage any interactions you may have with them. Under Australian Consumer Law, a debt collector must not:

Use any physical force or coercion (forcing you to do something).

Hassle or harass you to an unreasonable extent.

Mislead or deceive you (or attempting to do so).

Take advantage of people that are vulnerable, disabled, or have any other similar circumstances affecting them.

Not only do these laws relate to a debt collector’s behaviour towards you, but also your partner or spouse, family members, or anyone else connected with you. If you find yourself in a situation where a debt collecting is breaking these Laws, make a formal complaint to the Australian Competition and Consumer Commission (ACCC)1.


How And When Debt Collectors Can Contact You.

It’s equally useful to understand how and when debt collectors can contact you. They can do this by phone, mail, emails, social networking sites or by seeing you in person. Whenever you have communications with debt collectors, it’s vital that you maintain a record of such interaction including the time and date of contact, the methods of contact (letter, phone, person), the debt collector’s name and business name, and what was said during the correspondence. It’s also crucial to note that debt collectors must respect your right to privacy and providing your financial info to another party without your authorisation is breaking the Law.


The Australian Consumer Law also specifies that:

Debt collectors can only make up to three phone calls or letters per week (or 10 each month).

Debt collectors can only phone you between 7:30 am and 9pm on weekdays and 9am to 9pm on weekends.

Debt collectors can only make face-to-face contact between 9am and 9pm on weekdays and weekends, once a month, and can only visit you if you haven’t answered any of their previous attempts at communication.

There is to be no contact from debt collectors on national public holidays.

Debt collectors must be reasonably sure that if they contact you electronically (social media or email), that your account is not shared with another person and their correspondence can not be seen by anyone but you.

If you do agree to meet a debt collector in person, any threats of assault or violence should be reported to the police immediately1.


Know What Options You Have.

A debt collector’s job is not to be warm and give you a series of debt relief options. Their task is to urge you to repay as much of your debt as possible, as quickly as possible. So, the best thing to do is to have an understanding of what your debt relief alternatives are. You can conduct some research on the net to find what options you have or you could seek professional debt management advice (most firms will offer free advice in the beginning). Once you recognise what alternatives you have, you’ll be more confident in dealing with debt collector’s threats or demands, or any other collection tactics. If you don’t understand what your options are, it makes the job of the debt collector much simpler by being able to govern the interaction and advising you of what alternatives you have, whether they’re true or not.

It’s always a tricky situation when you come into contact with debt collectors. Their job is difficult, and they’ll use any means possible for you to repay your debt since the quantity of debt you repay and how fast you repay it determines the commissions that debt collectors receive from creditors. The best way to deal with interactions with debt collectors is to understand your legal rights, when and how they can contact you, document all communications, and understanding what debt relief choices you have. If you’re aware of these points, then it will notably improve your communications with debt collectors and hopefully won’t add additional stress to your current financial predicament. If you need any advice about what debt relief options you have, talk with the professionals at Bankruptcy Experts Bunbury on 1300 795 575 or visit their website for more details:




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