Bad debts? When debt collectors call, know your rights
Debt is a fact of life; some might say it’s a necessity. Rarely is a home or large-ticket item purchased without finance of some kind.
In Australia, we typically manage our financial obligations well. But rising interest rates, cost of living pressures and unexpected expenses all combine to place stress on already strained household budgets.
And in an increasingly cashless economy, it’s difficult to keep track of spending. Before you can say, tap-and-go, the morning latte and toastie has maxed out the credit card.
Most people tighten the belt and get back on track. Unfortunately, others find themselves caught in a downward spiral that quickly gains momentum until realising they’re in over their heads.
Debt collection: When a debt collector can contact you
Failure to meet your financial obligations may result in you being contacted by a debt collection agency as creditors seek to recoup their losses.
While this is traumatic, keep your cool and remember that you have rights.
According to MoneySmart.gov.au, a debt collector can only contact you:
- By phone during specific hours, up to three times per week or 10 times per month
- Face-to-face only as a last resort, and
- By social media if they are sure no-one else has access to your private messages.
The stress can often be overwhelming – it’s why so many people choose us to help with debt negotiation.
Debt collection: What debt collectors can and can’t do
Debt collectors may:
- Request payment or ask why you haven’t met a payment plan
- Offer to make, or review, a payment plan
- Advise consequences for non-payment, and/or
- Repossess goods for which you owe money.
Debt collectors cannot:
- Trespass on your property
- Bully, mislead, harass or abuse you, or
- Deceive or take unfair advantage of you.
If you believe a debt collector, or agency they represent, has acted outside of their boundaries, you are within your rights to take action.
Violent or threatening behaviour is never acceptable; immediately contact the police.
Alternatively, if the collectors are intimidating or harassing you, write to them or their agency to report the behaviour and request it be stopped.
If this doesn’t work, reach out to the Australian Financial Complaints Authority on 1800 931 678 for advice.
If we’re undertaking debt negotiation on your behalf, we deal with these phone calls – not you.
Debt negotiation: Getting help with debt collection
Many people say that facing debt collection is a terrifying experience. You feel pressure yet your hands are tied – if you’re no longer in a position to service the debt and there’s nothing you can do.
That’s where we help.
For us, finance isn’t just about buying a house or car – it’s also about assessing our client’s overall debt situation and, if necessary, helping them reduce or erase their debt.
There are many reasons why debts can escalate. Taxation debts can accrue, employment can change, or a struggling economy can mean that you struggle. We get it. But there’s nothing worse than putting your head in the sand, so reach out to schedule a private chat.
Debt negotiation: Managing debt collection on your own
Debt collectors aside, you must take action to manage your debt. No debt ever went away because it was ignored, but there are ways to dial down the pressure.
If you want to negotiate the debt on your own, here are some steps you can take today to get started:
- Make a list of all your obligations. Scary, sure, but knowing what you owe is the first rung on the ladder out of the red and into the black.
- Contact your mortgagee – seriously! Nobody wins if you can’t pay your mortgage; they really will help you set up a manageable payment plan until you’re back on your feet.
- Contact utilities companies. Again, they’ll help you set up a payment plan and going forward, may allow you to make monthly payments at a set amount. Bye-bye bill shock!
- Seek help via the National Debt Helpline (1800 007 007) or through the government’s MoneySmart.gov.au website.
Why help with debt negotiation is a no-brainer
Whether you’re trying to source finance with debt hanging over your head or you’re simply in too much debt, the situation can be challenging. With the right advice, however, you could make life a lot easier for yourself (not to mention taking some of the stress out of managing your finance) by talking to one of our experienced finance brokers.
We’ll work with you to create a realistic strategy for managing your expenses and guide you in developing a plan to move forward and eliminate debt. And while there may be a cost with debt negotiation, you’ll often find you save far more from our negotiation than any potential costs.
Debt can be debilitating and seem overwhelming but by understanding your rights, knowing where you stand financially, and seeking professional advice and support, you can take back control of your finances and look towards a comfortable financial future.