Bankruptcy in Australia – What To Understand about Debt Collection


A lot of individuals deal with financial challenges at some time in their lives, and most of these individuals are probably familiar with debt collectors. A debt collector is a person whose job is to collect debts on behalf of an enterprise. A debt collector can either be an employee of a firm you owe money to, or they can be a 3rd party servicing a lender. As you can imagine, it’s not a simple task to squeeze money out of people who simply have none. It would be fair to say that many people in debt are already pressured about their financial problems, and other people phoning them to remind them of this doesn’t always end well. Consequently, debt collectors have a lot of negative connotations. There have been numerous cases of people being harassed by debt collectors so it’s crucial that individuals who are being contacted by debt collectors have knowledge of their rights and effective ways to manage these sorts of interactions.

Learn about Your Legal Rights

Understanding what debt collectors can and can’t do is vital in being able to adequately 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 involve a debt collector’s behaviour towards you, but additionally 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).

How And When Debt Collectors Can Contact You

It’s equally useful to recognise how and when debt collectors can contact you. They can do this by phone, letters, emails, social networks or by seeing you personally. Every time you have communications with debt collectors, it’s integral that you keep a record of such interaction including the date and time of contact, the means of contact (email, phone, person), the debt collector’s name and business name, and what was said during the correspondence. It’s also vital to note that debt collectors must respect your right to privacy and supplying your financial information to another party without your permission is breaking the Law.

The Australian Consumer Law also stipulates that:

Debt collectors can only make up to 3 telephone calls or letters per week (or 10 monthly).

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 addressed 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 viewed 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 immediately.

Know What Options You Have

A debt collector’s job is not to be pleasant and give you a range of debt relief solutions. Their job is to persuade you to repay as much of your debt as possible, as quickly as possible. So, the best thing to do is to understand what your debt relief options are. You can carry out some research on the internet to search for what possibilities you have or you could seek professional debt management advice (most firms will offer free advice in the beginning). Once you understand what alternatives you have, you’ll be more comfortable in managing debt collector’s threats or demands, or any other collection tactics. If you don’t know what your options are, it makes the job of the debt collector much easier by having the chance to govern the discussion and informing you of what alternatives you have, whether they’re true or not.

It’s always a complicated 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 amount of debt you repay and how quickly you repay it determines the commissions that debt collectors receive from creditors. The best way to manage interactions with debt collectors is to know your legal rights, when and how they can contact you, document all interactions, and understanding what debt relief options you have. If you’re aware of these points, then it will notably improve your interactions with debt collectors and hopefully won’t add more stress to your current financial situation. If you need any advice about what debt relief alternatives you have, contact the professionals at Bankruptcy Experts Toowoomba on 1300 795 575 or visit their website for additional information: Bankruptcy Experts Toowoomba



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