Dealing with Creditors and Debt Collectors

It can be stressful when a creditor or debt collector contacts you about money. A debt collector is someone who is paid to collect the money you owe. Your debt may have been sold to a third party or they may be working on behalf of the creditor.

What happens when a creditor or debt collector calls and you don’t respond?

  • A debt collector will keep trying to contact you as it’s their job to try and recover a creditor’s money. This may add to your stress as you never know when they will call next.
  • The creditor or collection agency may also commence legal action to recover the debt.
  • If you move house without informing a creditor, they may place a listing on your credit file for the debt. This may affect your chances of getting loans or finance in the future.
  • Property such as your home or car may be at risk.


What options do you have?

  • Only return the calls if you know the debt is yours.
  • If your loan is secured, your property may be at risk. Seek legal advice urgently.
  • If you are the guarantor for the debt, you may have the same legal responsibility as the borrower.
  • If you have contacted the creditor in writing or made a payment within the last five or more years, then you are liable for the debt.


If you wish to offer to repay an amount, say the following:

  • “Unfortunately, after paying my basic living expenses I will only have $... to offer you each fortnight. I cannot afford to pay more. I realise the consequences may be a listing on my credit file and that you have the right to commence legal action. I will contact you when my situation changes.”

If you are unable to pay anything, say the following:

  • “Thank you for calling. My financial position has not changed. After paying my basic living expenses I do not have anything left to make payments to this account. I cannot afford to pay and I will contact you if my financial situation changes.”


Separating fact from fiction

  • Your wages cannot be garnisheed without a legal process being followed. If an order is placed by the court on your income, creditors can legally take a percentage of your wages. If a creditor has advised that they intend to garnish your wages seek legal advice.
  • Your government benefits/allowances cannot be seized by a creditor/collection agency as this is against the Social Security Act 1991 Rules 855 (1) of the Queensland Civil Rules.
  • Your household goods can only be seized in Queensland if the debt is secured against them. However, no one can enter your home without a court order. Unsecured goods can be seized by creditors in some circumstances. For example, when they have obtained a warrant for the seizure or sale of your property.
  • Non-payment of a debt is not a criminal offence, so you cannot go to jail. The exception would be use of a dishonored cheque which has been dishonored twice. A warrant for your arrest can be issued for fines owed to the State Penalties Enforcement Register.


Know your rights

  1. Debt collectors cannot contact you more than three times a week by phone and they cannot contact you more than ten times in any month (please note unanswered calls do not count as contact).
  2. They cannot make face-to-face contact with you more than once a fortnight.
  3. Debt collectors can only visit your home or workplace if there is no other way to contact you. Debt collectors must comply with a request by you that they do not enter your workplace.
  4. Debt collectors cannot discuss your finances in front of your co-workers or anyone else.
  5. Statute barred debts are debts that have sat dormant for six years without action from the debtor or creditor and without payments being made. After six years, the debts cannot be pursued for repayment. Seek legal advice to find out if the debt is statute barred.


What options exist?

In any financial matter, the best thing to do is to obtain support as soon as possible. You can contact the National Debt Helpline for free on 1800 007 007 to talk to a Financial Counsellor.

  1. Create a budget to find out your capacity to pay. Do not agree to something you cannot afford.
  2. Contact the creditor or debt collector and discuss a payment plan. Ask for more time so that you can contact a Financial Counsellor for support.
  3. You can try to return the property (white goods, car etc.). However, you will still be responsible for any remaining debt.
  4. Check if your debt is secured to any of your assets. If your debt is secured to your car or home, you may be at risk of losing them.

Preventative measures

There are some preventative measures you can take which may stop the debt going to a collection agency.

Contact the National Debt Helpline on 1800 007 007
The helpline can refer you to services that may be able to provide further support, like emergency relief providers in your area.
Concessions and rebates
The Queensland government has published a full list of their concessions and rebates that you may be eligible for.
Learn more
Make a plan
Be prepared. Know your rights and responsibilities and have a solution in place when a creditor or debt collector contacts you.
Is it your debt?
Check that the debt is actually yours. If you are unsure, do not admit responsibility for it. It may be an old debt nearing the end of its legal collection period, at which time it becomes statute barred, and not recoverable. To find out more seek legal advice or call the National Debt Helpline on 1800 007 007.

Additional information

women meeting with finance councillor
Looking for guidance?
Contact us today to organise a meeting with one of our financial counsellors.

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