Dealing with debt collectors

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Dealing with debt collectors

Know your rights when they come knocking

If you’re caught in a cycle of overdue and unpaid bills, the thought of debt collectors can have you shaking in your boots every time the phone rings or there’s a knock at the door. And sure, while dealing with debt collectors can be stressful, the good news is there are laws to prevent them from making your life a misery. We get you up to speed on your rights and some top tips that can get your finances back on track.

What do debt collectors do?

So you’ve fallen a few payments behind on you bills and are hoping you might just get away with it? Uh-uh. Chances are, if you ignore your provider’s requests for payment, they’ll send a debt collection agency your way to try and reclaim the unpaid debt.

  • Sometimes the company you originally owed money to has sold this debt to the debt collector, giving them even more incentive to reclaim the unpaid funds from you.

A debt collector can contact you to:

  • Make a demand for payment
  • Provide information about your account
  • Make an offer to settle your account or establish an alternative payment arrangement
  • Explain the consequences and legal action they might take if you don’t repay your debt
  • Inspect or recover any goods you may have used as security for your debts (if they have a right to do so)
  • Find out why you haven’t responded to attempts to contact you or kept to a repayment plan (if this is the case)
  • Review existing payment arrangements

Here’s how and when a debt collector is allowed to contact you

While debt collectors can contact you in a variety of ways – by phone, in person, by letter, email, and even on social media – they must respect your right to privacy at all times.

Unless you request or agree otherwise, a debt collector’s contact with you is restricted to:

  • By phone – no more than 3 times a week or 10 times a month, and only between 7:30am and 9pm weekdays, or 9am and 9pm weekends.
  • In person – no more than once a month, and only between 9am and 9pm.
  • Debt collectors should only visit you if they’ve attempted to contact you by phone, letter and email and you haven’t responded.
  • If this becomes necessary they should visit you at home – coming to your workplace should be the last option.
  • A debt collector can only use email or social media to contact you if they’re reasonably sure that the account is not shared with another person and that their message cannot be viewed by anyone except you.
  • Debt collectors can’t contact you at all on national public holidays.

Here’s what debt collectors aren’t allowed to do

A debt collector can’t force, trespass or intimidate. This means they can’t:

  • use or threaten you – or your family and friends – with physical force of any kind
  • damage (or threaten to damage) your property
  • block your way, or block access to your property
  • remain on your property when asked to leave (unless they have a Court Order)

A debt collector can’t harass or verbally abuse you, or use intimidating behaviour. So they’re not allowed to:

  • shout, swear, use racist language or make personal or demeaning comments,
  • contact you any more than allowed, or outside of the permitted hours outlined above
  • lie or make misleading statements, including about the money you owe or what might happen if the debt is not paid
  • make their demand letters look like court documents, or pretend to be or to act for a solicitor, court or government body

A debt collector also shouldn’t take advantage of your:

  • illness, disability, age, illiteracy or other disadvantage or circumstances
  • lack of knowledge of the law, debt recovery process, or the consequences of not paying the debt

If you believe you are being unnecessarily harassed by a debt collector, find out how to complain.

Want to dispute a debt?

So, you have a debt collector chasing you for a debt you believe you’ve already paid, or isn’t yours? You’ve every right to dispute it.

  • Contact the lender, creditor or credit provider and tell them you dispute the debt.
  • Ask the debt collector to provide your account information, and a copy of your contracts.
  • It’s also a good idea to see if you’re entitled to free dispute resolution. You should also see free legal advice.

Want to dispute the amount of a debt?

Perhaps you accept that you do owe some of the debt, but you disagree (or are unsure) about the amount you’re being chased for.

  • Ask for an itemised statement of your account that sets out:
    • the amount and date of the alleged debt
    • how the debt was calculated
    • details of all payments you’ve made and the amounts owing, including principal, interest, fees and charges
  • The debt collector can’t continue trying to chase you for payment until you have received this information.
  • A default listing on your credit report should not be made during this time.

You’ve already paid a debt you’re being chased for

Here’s where keeping accurate payment records comes in very handy.

  • If a debt collector has contacted you about a debt that you believe you’ve already paid in full, put all the details in writing.
  • Include copies of any payment records or information you have that prove the debt has been paid.
  • If the debt collector continues to contact you, find out how to complain.

Need more time to pay?

So, you agree with a debt but are having difficulty repaying it?

  • Negotiate a repayment plan with the debt collector. They may agree to extend your repayment period or allow you to make smaller repayments over a longer time.
  • Be realistic about your living costs and other debts. Use a budget planner to work out what you can afford to pay.
  • Be sure to keep to any repayment agreement you make – but if for any reason you can’t, contact the debt collector again and work out what is a reasonable and manageable amount for you.
  • Sometimes debt collectors will agree to finalise the whole debt if you make a lump sum payment of part of the debt. But remember – only agree to pay an amount that you can afford.

What if the debt collector rejects your repayment proposal?

If this happens, put it in writing. Write to them advising how much you can afford to pay and how often.

  • You shouldn’t be forced to agree to a repayment plan that you can’t afford.
  • If you can’t come to an agreement, consider resolving the matter through a free external dispute resolution scheme.

Top tip: keep good records

Protect yourself from any other hassles that may arise down the line. If you reach an agreement with the debt collector over the phone or in person:

  • Ask for it to be confirmed in writing
  • Confirm it in writing yourself in a letter to the debt collector
  • Keep a copy of all letters you send
  • Store all your documents together to avoid losing any important information.

So you’ve tried everything, but you’re being taken to court

If you receive notice that you are being taken to court (such as a summons, statement of claim or liquidated claim), don’t ignore it!

  • Get free legal advice as soon as possible.
  • It’s important to be aware that if you don’t take action, judgment may be entered against you.
  • If that happens, the creditor may be able to enforce the judgment by repossessing your goods to sell and get their money back.

Still need help?

If you’re tearing your hair out desperately trying to make ends meet, remember that help is available. At City Finance, we’re different to other lenders – we understand how tough it can be to make ends meet and are here to help. We take the time to get to know you, and focus on your unique situation to tailor a loan and repayments around you and your needs.

Pop into  your local branch today for a chat and some helpful advice from our friendly staff.