On this Earth, we are all tenants. And the rent we are supposed to ultimately pay is indefinite. But while dealing with people you owe money to, it is great to keep your accounts settled. Debt collection is a serious profession for many. Once we take a debt, we work hard to pay them off, but sometimes the odds are not in our favour.
There may arise several unfathomed crises and giving back what we borrowed faces delay. Although you owe money to the creditor, but with the duty of repaying you are also entitled to certain rights. If we have to perform the duty to pay back, we have the privilege of certain benefits.
The right of collecting the provided amount of money is legitimate. But, if during the process of debt collection, the collector surpasses certain moral boundaries, you may call it Debt Collection Harassment.
To protect the integrity and mental health of debtors, there are certain laws imposed upon debt collection. By having sound knowledge of these laws, we can protect ourselves from the harassment caused by people in the process of debt collection.
Latest Debt Collection Guidelines Are Given By AFSA
The Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) both administer and implement the Commonwealth protection laws. Laws related to debt collection are also included in them. These provisional laws were imposed by the Australian Financial Security Authority (AFSA).
This guidance was jointly developed by the ACCC and ASIC to help lenders, collectors and borrowers. These guidelines help them understand their responsibilities and privileges and focus on ensuring that debt collection activities are carried out in a manner that is coherent with consumer protection laws.
Due to the recent COVID 19 crisis, certain temporary rules have been imposed. These rules pertain to temporary debt relief to debtors because of the ongoing economic distress among individuals. The below mentioned temporary rules have been in action since March 25, 2024.
- Bankruptcy charges can be instituted only for liabilities of $20,000 or more (which initially was $5000)
- Persons will now have 6 months (which initially was 21 days) to respond to a bankruptcy notice.
- One can apply for 6 months of creditors’ temporary debt security (which initially was 21 days)
- Only For debts of $20,000 or more (which initially was $2000), statutory claims may be made.
- Corporations now have 6 months to respond (which initially was 21 days) to a legislative requirement.
However, these provisional measures are only for 6 months.
Always Remember Your Dealings
While dealing with money, make the transactions as simple and straight forward as possible. Keep your accounts handy and understandable.
In case you do not recall committing to pay or if insufficient specifics led to your confusion, you are free to stand up for your rights. Defend your rights listed in the validation notice if you are not sure that you owe any money or do not have sufficient details.
In cases of unknown claims, the creditor’s contact information or any other details could help you decide if you owe any money.
Under the Federal Collection Practices Act, your application should be on paper and submitted within a month of obtaining the note for confirmation.
Unless it receives data sensitive to your request, the collector must stop debt collection.
Attach a record of your demand for documents and return it through evidence of receipt, including certain return receipt letter or email confirmation.
If you may, host a healthy negotiation. You may do so in case of not being able to repay in full at the time of debt collection. Emergencies might delay or hamper your repayment plans.
For example, you may lose your job, an unexpected medical emergency might arise or you may have to pay divorce alimony.
To change your payment schedules, inform the creditors in the earliest notice regarding the possible changes or delay in repayment. Instalments of payments may be reconsidered depending on the degree of the situation.
What Can You Expect Of A Creditor Or Debt Collector?
In the process of debt collection, the creditor is expected to do any of below listed:
- Remind you of payment when the repayment or due date is approaching.
- Approach you for an outstanding amount that you are supposed to pay.
- The debt collector can call you for a maximum of 3 times for debt collection per week.
- Visit your home for debt collection.
- Warn you regarding the legal action that might be taken against you. (In case you fail to pay the debt)
- Specify that the listing of missed, delayed or unpaid money would have an impact on your credit report.
What Should You NOT Expect From The Creditor Or Debt Collection?
In the process of debt collection, sometimes certain boundaries may be violated. In such situations, you ought to know what behaviours are incorrect. This way, you can protect yourself against intolerable conduct.
- Visit or call you at the workplace to make third parties aware of the collection of debts.
- Give documents that look like court papers to you (but are not court papers).
- Use verbal expression that is violent or intimidating.
- Threaten to return you to prison
- Try to intimidate to reveal your indebtedness to your employer, neighbours or family.
- Threaten to take and sell all of your assets on which you do not have a mortgage or any other form of protection unless you already have a judicial order.
- Threaten without a court order to garnishee (take) funds from your income
- Contact you very often (four times a week or more) or call you at inappropriate hours, such as very early morning (before 7 am) and/or near midnight (after 9 pm)
Thus, if any of the above-listed behaviour is encountered by you, be free to contact the moloneyandpartners.com.au or the public welfare agencies in Australia. You may approach ASIC (Australian Securities and Investments Commission), ACCC (Australian Completion and Consumer Commission) and NSW Police.
In the case of physical or verbal abuse during the debt collection, the alleged is entitled to an Apprehended Violence Order (AVO).