Disputing a debt
Once you’ve told the debt collector that the debt is in dispute, debt collection activity should stop until this is resolved.
A default listing on your credit report should not be made. To get a copy of your credit report and make sure it is correct, visit the ASIC MoneySmart website.
If the debt has been paid
If a debt collector contacts you about a debt you have already paid, explain the situation in writing. Include copies of any documents that prove the debt has been paid.
If the debt collector continues to contact you, consider discussing the issue with a financial counsellor or lawyer. You may be able to complain to an external dispute resolution scheme. You can also report the issue to the ACCC.
If the debt should be less
You may accept that you owe the debt but disagree with the amount.
Ask for an itemised statement of your account that sets out:
- the amount and date of the alleged debt
- how it has been calculated
- details of all payments made and amounts owing. This should include principal, interest, fees and charges.
If it's not your debt
If you’re approached about a debt you know nothing about, it may be a case of mistaken identity. Showing your driver's licence or other proof of identity may fix this, but a debt collector can’t force you to do this.
You should also get a copy of your credit report to make sure it is correct.
Old debts
Some old debts can’t be recovered by a debt collector.
If you are contacted about an old debt, don’t make a payment or confirm the debt in writing until you get legal advice. You may have a defence against a debt if:
- a long period of time has passed since you last made a payment or confirmed the debt
- no court action has been taken to recover the debt.
Generally, you can rely on this defence if:
- 6 years have passed since you last made a payment or confirmed the debt
- there is no court judgement against you.
In the Northern Territory, this period is 3 years.
If this is the case, recovery of the debt through the courts is said to be ‘statute-barred’. The courts won’t enforce the debt. If you think you’ve been contacted about a debt that is ‘statute-barred’, you should get legal advice.
Being taken to court
Seek legal advice if you are being taken to court.
If you disagree with the debt, get legal advice. This could be because you think:
- you don’t owe the amount claimed
- owe a different amount, or
- have a valid defence.
A defence is a legal reason why a debt can’t be enforced by a court. For example, there are laws that stop debts being collected through the courts after a certain time.
If you have a defence against paying the debt, you’ll need to file documents with the court. Seek legal advice before doing this.
You may still be able to negotiate a repayment plan. You can do this even if a court order has been made against you.
Other help to deal with a disputed debt
