How will my Debt be Collected from a Creditor?
The debt collection process is not simply a person knocking on your office door and asking for their debts to be repaid. There are guidelines set out by the Australian Competition Consumer Commission (ACCC) and the Australian Securities and Investment Commission (ASIC) which dictates how debt collection agencies operate.
Creditors will generally take steps to avoid dealing with clients who are likely to not pay their debts in the first place such as completing background checks on you and your credit history. They may also choose to draw up a legally binding contract which informs you of the consequences if you miss a payment. However, if you owe large sums of debt and have not paid it, you can potentially expect a creditor to employ the assistance of a debt collection agency to follow up on unpaid invoices.
The agency will then:
1. Gather as much information as possible about you and the nature of the debt.
2. Make contact with you through a phone call, email or letter.
3. Send you a debt collection letter.
4. Issue a Service of Complaint if the attempt to contact fails or if you have refused to pay the debt. Under these circumstances, there will be strong evidence that entitles the debt to be paid. The creditor can then choose to bring the matter to Court. If you do not respond to the Service of Complaint, you will be required to pay the debt and the Court will rule in the creditor’s favour.
Finally, you will then be forced to make a payment arrangement.
If you need professional debt help, contact Debt Free Australia today, free of charge on 1800 676 598. We’ve helped thousands of Australians with their debt problems so you can trust us to help you too. Our licensed financial advisers offer impartial and confidential advice to help you build a secure financial future.