When you’re struggling with debt, you might find yourself in the difficult situation of having to deal with debt collectors. While most will do the right thing, some may try to prey on your ignorance of laws relating to debt collection and try get away with more than they should.
Debt collectors can be stressful to deal with, particular when they overstep the line. But as the old cliché goes, knowledge is power, so to help you cope as well as possible, this article tells you everything you need to know about what debt collectors can and can’t do and say.
Control the Conversation
A debt collector is either an employee of the lender you owe or part of an outsourced company who specialises in debt collection. In either case, this individual’s responsibility is to get as much of the debt back as possible. Their job is not to explain the debt relief options available to you (such as Part 9 Debt Agreements or Part 10 Insolvency Arrangements). Their job is to call, write and email in order for you to repay your debts.
So when it comes to dealing with debt collectors, one of the first things to do is to realise what your debt relief options really are. You may do this by first researching online or by calling a debt administrator to talk through your options in more detail. Once you know these options, you’ll feel more confident in dealing with any debt collector threats, demands or collection tactics as you’ll know the plan you’re following. If you don’t first decide this, it’s easy for the debt collector to dictate the conversation and tell you what your options are.
To re-iterate, talk through your options with an independent professional that can help you decide on a course of action and make that clear in all of your dealings with your debt collector.
Understand the Law
The next stage is purely about the law. Due to the fact that some debt collectors employ unscrupulous tactics, the Federal Government has established a credit code that all debt collectors must abide by. If they don’t, you can complain to ASIC on 1300 300 630 for debt collection relating to credit cards and personal loans and the ACCC on 1300 302 502 for debt collection relating to bills.
Debt Collectors cannot do the following:
- Use offensive or abusive language towards you.
- Threaten to make you immediately bankrupt or have a portion of your wages garnished (docked) when your case has not yet been heard in a court.
- Speak to you more than 3 times per week or 10 times per month – provided you take each of those calls, anything beyond that is considered to be in breach of the code.
- Make threats towards you.
- Talk to other people about your situation (such as neighbours, co-workers or family) without your consent.
- Talk to your employer about your case unless you have given permission or a court has ordered that your wages can be garnished.
- Call you outside of the hours of 7.30 – 9pm weekdays or 9am – 9pm on weekends.
When you’re dealing with debt collectors make sure you take notes so you can record any breaches of the above. Also be sure to inform them of any breaches that they make and that you will be referring such behaviour to the authorities mentioned above.
Having taken control of the conversation using the tactics mentioned above, it is important to then take positive steps to resolve your debts. This is of course, the only way to gain lasting relief from debt collectors.
With this in mind, here are three steps you should follow:
- As mentioned above, speak to a professional and work out exactly how you plan to deal with these debts that have now started to overwhelm you. A debt administrator will talk through your full range of options, including many lesser known schemes you may not currently be aware of.
- Let the debt collector know what the plan is. This will make it more likely that they will give you the time you need to put your plan into action and to ease up on their harassment.
- If you decide to enter a Debt Agreement, Part 10 insolvency Agreement or bankruptcy through an administrator, let the debt collector know that you have done this. From this point on, they should liaise with the debt administrator instead of you regarding your debts.
By following the above steps, dealing with debt collectors should be a far less stressful experience.