Debt collection guideline for collectors & creditors

Important information relating to COVID-19

Since 25 March 2020 new rules have been in place to provide temporary debt relief for financially distressed individuals and businesses due to the economic impacts of COVID-19 (coronavirus).

The temporary rules will be available for 6 months and include that:

  • bankruptcy proceedings can only be started for debts of $20,000 or more (up from $5000)
  • individuals now have 6 months to respond to a bankruptcy notice (up from 21 days)
  • individuals can apply for 6 months’ temporary debt protection from creditors (up from 21 days)
  • statutory demands can only be issued for debts of $20,000 or more (up from $2000)
  • companies now have 6 months to respond to a statutory demand (up from 21 days).

For further information about the measures available to individuals, see: Australian Financial Security Authority: Changes to bankruptcy law provide temporary relief for Australians in debt.

For companies, see: Australian Government: Temporary relief for financially distressed businesses.

If you receive a bankruptcy notice or statutory demand you should seek independent legal advice or contact a financial counsellor.

Both the ACCC and the Australian Securities and Investments Commission (ASIC) enforce Commonwealth consumer protection laws, including laws relevant to debt collection.

The ACCC and ASIC have jointly produced this guideline which aims to assist creditors, collectors and debtors understand their rights and obligations, and ensure that debt collection activity is undertaken in a way that is consistent with consumer protection laws.

The guide was originally published in 2005 and has been updated to reflect significant changes to the law, such as the introduction of the Australian Consumer Law in 2011, the National Consumer Credit Protection Act 2009, and privacy laws and principles.