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How To Deal With Debt Collectors

How To Deal With Debt Collectors

So you’re struggling with paying your loan, credit card or bills, and then a debt collector contacts you. How should you respond?

7th June 2017

Are you tired of receiving the same emails, letters and phone calls from debt collectors? Do you wish they would stop visiting your home and not leaving when you request them to do so? Do you have an urge to ignore them altogether?

A debt collector is a person from a credit or service provider or debt collection agency who collects debts on behalf of an individual (creditor or someone on behalf of a creditor) or a company.

Debt collectors can be stressful to deal with, particularly when they hassle you every day or harass you to pay back what you owe. If you are currently dealing with a debt collector, here are four tips on how you can make the experience less intimidating and easier for you.

It is important to seek professional legal advice to protect you from bad debts. LawPath can get you in touch with a debt collection lawyer who can help you clarify your rights and determine the best solution.

1. Know Your Legal Rights

It is important to know your rights so you can familiarise yourself with the law and the debt recovery process, including the consequences of not paying a debt. This enables you to identify what a debt collector is and is not allowed to do.

Under section 168 the Australian Consumer Law (ACL), a debt collector is prohibited from:

  1. Using physical force or coercion to make a payment. For example, threatening physical force towards you or anyone else.
  2. Harassing, verbally abusing you or hassling you to an unreasonable extent. For example, shouting at you; making offensive comments; using obscene language; or contacting you at unreasonable times.
  3. Making false or misleading statements. For example, making false statements about how much money you owe or what will happen if you do not pay the debt.
  4. Engaging in deceptive conduct. For example, pretending to be or act for a solicitor, court or government body.
  5. Taking unfair advantage of your vulnerability (such as illiteracy, age or illness), disability or other circumstances affecting you.

Debt collectors must respect your privacy. They cannot reveal information about your financial situation to another person without their permission. Moreover, if a debt collector contacts you over the phone or meets you in person, there are time restrictions they must follow.

For more information about the ways debt collectors can contact you and the time restrictions, check out ASIC’S Money Smart Financial Guide.

If a debt collector is abusive towards you, or misleads or threatens you, the ACCC recommends writing a letter of complaint to your lender using their sample letter of complaint about debtor harassment. If this fails, you can make a formal complaint to the Australian Competition and Consumer Commission (ACCC).

2. Know Your Options

If a debt collector contacts you, there are six options you should consider:

  1. Disputing the debt if it does not belong to you.
  2. Writing a Cease and Desist Letter requesting the debt collector to stop contacting you.
  3. Disputing the debt if you have already repaid it in full. You can send them copies of proof of payment
  4. Disputing the debt if the amount and date of the debt is incorrect or you have paid it partially.
  5. Negotiating a repayment plan. The debt collector may allow you to make small payments over a period of time.
  6. Contacting dispute resolution services to resolve any issues about the nature of the debt.
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3. Collect and Keep All Correspondence

Always keep good written records of all letters and emails that are exchanged between you and the debt collector. It is prudent to photocopy all letters you send or receive, and any receipts or records of payments made.

You should keep records of every phone call made between you and the debt collector, including the date, time, their name, the name of their collection agency and what was said.

4. Ask A Professional For Help

Dealing with debt collectors can be frustrating, but you do not have to do it alone. You can contact a professional debt organisation, or get legal advice from your local community legal centre, legal aid office, or a lawyer. Some community organisations and community legal centres offer free financial counselling as well.

For advice or assistance, you can get in touch with a lawyer experienced in debt collection through the LawPath network.


The law will prevent debt collectors from making your life miserable. You should always be honest with your financial situation. If you have significant debt, there are a variety of options you can consider that may help you become debt-free.

Want to learn more? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 700+ expert lawyers or to get answers to your legal questions.

Fiona Lu

Fiona is a Paralegal working in our content team which aims to provide free legal guides to facilitate public access to legal resources. With an interest in information, media, consumer and employment law, her primary focus is on how technology will affect the future of the legal industry.