Money is one of the leading causes for severe stress and anxiety throughout Australia, but sadly it is on the rise as debt becomes more prominent. Saving money or even just avoiding falling deeper into debt can be a real struggle, and it certainly doesn’t help having to deal with a persistent debt collector.
So, how can you best approach those pesky phone calls and put your debt to rest?
How and when can debt collectors contact you?
Debt collectors can actually contact you via a variety of channels including phone, letter, email, in person, and even social media. It’s important to understand your rights in this situation.
Debt collectors should not contact you:
- on national public holidays.
- more than 3 times per week or 10 times in a month.
- outside the hours of 7:30am-9pm on weekdays and 9am-9pm on weekends.
- if they cannot be reasonably sure that account is not shared/viewed with another person.
In addition, debt collectors should never:
- threaten, trespass, or intimidate you.
- Harass or abuse you in any form.
- Make false or misleading statements.
In return, you should always:
- be honest about your financial situation, including other debts.
- return calls from your debt collector, or respond to their correspondence promptly.
- agree to a repayment arrangement if you can afford it.
- tell the debt collector when your contact details change.
Debt Repair Agencies: Approach with Caution
It might sound like a good idea to pay someone to help you fix your credit problems but credit repair agencies may not always be able to do what they claim. Be wary of ‘credit repair’ or ‘debt solution’ companies that claim they can improve your credit report. In most cases, default listings and other historical information cannot be removed from your credit report unless they are proven to be wrong. Find out more about what credit repair companies can and can’t do for you.
If the debt is yours, but you will have difficulty repaying it, a debt collector may agree to extend your repayment period or allow you to make smaller repayments over a longer time. Be prepared to provide information about your financial situation to demonstrate what you can afford to pay. Be realistic about your living costs and other debts.
Work out what you can afford to pay by using a free Budget Planner like ASIC’s Money Smart Planner.
If you cannot make any repayments on a debt you owe or your repayment plan is rejected, be sure to seek free legal advice.
This blog post has included extracts from Money Smart.