If you fall behind on your loan, credit card or bills, a debt collector might contact you.

A debt collector is a person who collects overdue debts. This could be for themselves, or for a lender (such as a bank), service provider or debt collection agency.

Debt collection is legal. The people you owe money to (your creditors) have a right to get it back. But it's not okay to harass or bully you.

If you receive a notice about being taken to court, get free legal advice straight away. If you ignore it, you risk your goods being repossessed and sold.

What debt collectors can and can't do

What debt collectors can do

Debt collectors must respect your right to privacy. They can contact you to:

• ask for payment
• offer to settle or make a payment plan
• ask why you haven't met an agreed payment plan
• review a payment plan after an agreed period
• advise what will happen if you don't pay
• repossess goods you owe money on, as long as they've been through the correct process

There are restrictions on how and when debt collectors can contact you:

By phone

• Monday to Friday, 7:30am to 9pm. Weekends 9am to 9pm
• no more than 3 times a week, or up to 10 times a month
• not on national public holidays

Face to face

• only as a last option if you haven't responded to phone calls or other ways to contact you
• any day between 9am and 9pm

Email and social media

• only if they're reasonably sure you don't share your account and only you can see your messages

What debt collectors can't do

By law, debt collectors must not:

• trespass on your property
• use overbearing tactics or abusive language
• harass or contact you at unreasonable times or more than is needed
• mislead or deceive you
• take unfair advantage of you because of illness, disability, age, illiteracy, or lack of understanding of the law
• discuss your debt with someone else without your permission

These protections also apply to your family.

If a debt collector's behaviour is unacceptable

If a debt collector threatens you with violence or physical force, contact the police immediately.

If they're harassing or intimidating you, ask them in writing to stop it. The Financial Rights Legal Centre has a letter template you can use.

If the behaviour doesn't stop, contact the Australian Financial Complaints Authority (AFCA) to make a complaint and get free, independent dispute resolution.

How to deal with a debt collector

Be honest and cooperative

If a debt collector contacts you, it's your responsibility to:

• Be honest about your financial situation, including other debts.
• Reply in good time to calls or letters.
• Agree to a payment plan if you can afford it.
• Tell the debt collector if your contact details change.

Keep good records

Keep a record of all your communication with the debt collector. Include:

• date and time of contact
• the name of the debt collector and company they work for
• how they contacted you (in person, by phone, letter, email or text)
• who said what

If you're struggling to pay the debt

If you know you owe the debt but are struggling to pay it:

1. Work out what you can afford to pay

Use our budget planner to work out what you can afford to pay. Calculate your income and expenses to work out how much, if anything, is left over.

2. Propose a payment plan with the debt collector

Contact the debt collector, say you're in financial hardship and you want to work out a payment plan. They must consider your request.

They may ask for financial details to show how much you can afford to pay. Only offer an amount you will be able to stick to.

The debt collector may agree to:

• Let you pay back smaller amounts over a longer time.
• Close the debt if you pay part of the debt in a lump sum.
• Waive the debt, if you're on a low income, have no major assets, and your situation is unlikely to change.

Ask the debt collector to put the agreement in writing.

If they reject your request, put it in writing (if you haven't already). If they still won't agree, you can make a complaint.

3. Do your best to stick to the payment plan

If you have trouble paying, contact the debt collector immediately. Explain why you're struggling and discuss a new arrangement.

If you want to dispute the debt

You can dispute (disagree with) a debt if:

• It isn't yours.
• You don't owe all, or part of it.
• It's more than 6 years (3 years in the Northern Territory) since your last payment, and there's no court judgment against you.
• You have grounds not to pay (for example, a breach of your rights).

Contact the debt collector and tell them why you're disputing the debt.

If you're not sure about the debt or amount owed

If you think a debt isn't yours, or you disagree about the amount owing, ask for:

• a copy of the contract or agreement
• a statement showing:
• the amount and date of the debt
• how it was calculated
• payments made and amounts owing (for example, principal, interest, fees and charges)

If you're threatened with legal action

Ask the debt collector to delay legal action to give you time to get legal advice.

If you've already paid back the debt

If a debt collector contacts you about a debt you've already paid, explain that in writing. Include copies of records that prove it.

Where to get help if you need it

Talk to a financial counsellor

Financial counsellors offer free, independent and confidential help to people with money problems. They may also negotiate with creditors on your behalf.

Get free legal help

Community legal centres and Legal Aid agencies offer free legal advice and can help you with disputes and debt recovery through the courts.