What Can Debt Collectors Do If You Don't Pay?

For the average Australian, borrowing money will be a process commonly enacted throughout life. Whether the value is big or small, you will always have to repay your debt. In times of need, you, the debtor, can benefit from the wide range of creditors that will happily lend funds under strict contracts. So, what can debt collectors do if you don’t pay? Will debt collectors take you to court? Can creditors take you to court?

Australia has many rules and regulations regarding the loaning of money and what debt collectors can and can’t do, which will be detailed within this guide.

Let’s start with the basics.

What Is a Debt Collector? 

A debt collector is either a person or an agency that collects debts that are owed. Individuals, businesses, or creditors draw on the services of a debt collector to which a sole debtor owes money. A debt collector may become involved once the creditor has exhausted all avenues to obtain the debt owed from the debtor. 

What Can Debt Collectors Do If You Don’t Pay?

Debt collectors bring unique experience and the technical ability to collect debts as quickly and efficiently as possible. Debt collectors use several actions and processes to recover any outstanding debts, such as: 

• Contact the debtor by mail, email, or phone
• Begin legal proceedings and court orders against the debtor
• Affect your credit rating 
• Send enforcement to your home or business to seize property 
• Issue a garnishee order on your bank, employer, or tenant

What Is a Debt Collector Prohibited from Doing?

As a debtor, you are also protected by a series of rights that prevent debt collectors from acting in a certain way towards you. These include: 

• Using physical force or coercion
• Harass you to an extent deemed unreasonable
• Take unfair advantage of you due to illness, disability, age, illiteracy, or lack of understanding of the law.
• Attempt to mislead or deceive you
• Publicise your debt with anyone without your permission

If you are concerned that a debt collector has crossed a legal boundary, you can lodge a formal complaint to a relevant body. 

Dealing with a Debt Collector 

It may be in your interests to deal with the debt collector reasonably.  A possible solution could involve setting up a payment plan if required. It is imperative that you also keep a record of all encounters and communications with a debt collector and the nature of each discussion. 

Will Debt Collectors Take You to Court?

Commencing legal proceedings in a court is an expensive exercise and is usually the last resort to recuperating a debt from a debtor. Most states recommend that the debtor and the creditor come to an alternate solution to resolving the debt. An alternate solution is often pursued when debts are small. However, following the exhaustion of other options, and if you, the debtor, has ignored previous correspondence, then the collection company may begin legal proceedings. 

Can I Dispute a Debt? 

Circumstances may arise where an individual has settled their debt, and either a creditor or debt collector are continuing to seek payment, or if there has been a mistake and the individual does not owe the money that has been requested. When this happens, appeals can be made to courts and/or tribunals in each state to re-evaluate the nature of the debt and pass judgement after hearing the case from either side. If it has been more than six years between payments or the debt has been acknowledged in writing, and the debt is unsecured, then you may not have to pay the debt. Distance between payments is grounds for a dispute worth exploring with a legal professional if the criteria apply to you.  

How Can We Help?

Understanding your legal rights as both a debtor and creditor is incredibly important when chasing or managing debt. As a debtor, it can be frightening, but it is important to understand how to properly manage the situation and make the best out of your financial circumstances.

If you are wondering, “What can debt collectors do if you don’t pay?”, or, “Can debt collectors take you to court?”, then get in contact with the highly knowledgeable team at wilson/ryan/grose. For over 125 years, the wilson/ryan/grose office has delivered reliable and friendly service across Townsville and on the Sunshine Coast. We can help navigate the tricky field of debt collection and help both parties come to a satisfying resolution. If you require legal assistance with a debt or recovering one, give our law firm a call today on 1800 974 529.