Have you ever received a notice from a debt collector and felt overwhelmed, unsure of your rights or what to do next? You’re not alone. With the economic impact of COVID-19, many Australians are facing financial struggles and mounting debts. The stress of debt can be exacerbated by the fear of legal action or the pressure of aggressive debt collectors. But before you panic or ignore the problem, know that there are legal avenues available to you.
Whether you’re dealing with errors in the debt amount or facing harassment from debt collectors, we’ve got you covered. Read on to learn more about how to dispute a debt and regain control of your financial situation.
What Is Debt?
Debt refers to money owed to a creditor, which can include individuals, banks, or other financial institutions. Debts can be personal debt (credit card debt, personal loans and payday loans), housing debt (related to mortgages or home loans) and business debt (related to starting or running a business).
In Australia, credit reporting agencies collect information about your credit history, including debts you owe and payments you’ve made. If you fail to make payments on a debt, the creditor or debt collector may take legal action to collect the debt. In some cases, you may be able to negotiate a debt agreement with your creditor to pay off the debt over time.
However, it’s important to remember that not all debts are legitimate, and disputing a debt may be necessary in some cases to protect your rights as a debtor and avoid financial harm.
When To Dispute Debt
Here are situations where you may need to dispute the debt before making any payments and the steps you can take to resolve any issues.
Errors in the debt amount or payment history
It is not uncommon for errors to occur in debt amounts or payment history. That is why it is crucial to thoroughly check your credit report and billing statements for any discrepancies. For example, you may have paid off a debt in full, but the creditor or debt collector continues to demand payment. Alternatively, there may be an error in the amount owed due to a mistake in calculation or application of fees.
If you notice an error in the amount you owe or the payment history, you should dispute the debt. You can do this by contacting the creditor or debt collector and providing them with the correct information. Under certain conditions, you may need to provide evidence to support your dispute.
Dispute over the validity of the debt
In some cases, you may dispute the validity of the debt itself. For instance, you may not recognise the creditor or the debt may be past the statute of limitations for collection. You may also dispute the debt if you believe the creditor has not followed proper legal procedures in attempting to collect the debt.
If you are uncertain whether the debt is valid, you can request validation from the creditor or debt collector. This means they need to provide proof that the debt is yours, and they have the right to collect it.
Harassment by debt collectors
Debt collectors are regulated in Australia by the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC). They are required to follow strict rules and guidelines when attempting to collect a debt.
If you believe you are being harassed by debt collectors, you should contact ASIC or ACCC to report the incident. You can also request that the debt collector stop contacting you or only contact you in writing.
Identity theft or fraud
If you believe you are the victim of identity theft or fraud, you should immediately contact your financial institution and the police. You may also need to dispute any debts that have been fraudulently opened in your name.
Statute of limitations
The statute of limitations is the legal time limit for debt collection. In Australia, the time limit varies depending on the state or territory and the type of debt. If more than 6 years have passed (3 years in the Northern Territory) since you made the last payment on a debt, and there is no court judgment against you, you may be able to dispute the debt on the basis of the statute of limitations. Once the statute of limitations has passed, the creditor or debt collector can no longer take legal action to collect the debt.
When you are unsure whether the statute of limitations has passed for your debt, you should seek legal advice from a dispute lawyer.
Are you facing financial hardship and are unable to pay your debts? If yes, then you may consider filing for bankruptcy. This is a legal process that can provide relief from overwhelming debt.
When considering bankruptcy, be sure to understand the consequences and seek professional advice. Filing for bankruptcy will have a significant impact on your credit rating and may affect your ability to obtain credit in the future.
How to Dispute a Debt Effectively
Gather evidence and documentation
Before disputing a debt, gather all the necessary evidence and documentation. This may include contracts, receipts, bank statements and any other relevant documents. Having a complete set of documents can strengthen your case and provide a clearer picture of the debt.
Contact the creditor or debt collector
Once you have gathered all the necessary evidence, it’s time to contact the creditor or debt collector. Explain your position clearly and provide any evidence that supports your claim. It’s important to remain calm and professional during the conversation. If the debt collector is harassing you, you may want to consider seeking the help of dispute resolution lawyers or litigation lawyers in Brisbane.
Seek legal assistance
If you are unable to resolve the issue with the creditor or debt collector, seeking legal assistance may be necessary. Dispute resolution lawyers or litigation lawyers can help you navigate the legal system and provide legal advice on your situation. They can also represent you in court, if necessary.
Remember, disputing a debt can be a lengthy process, so it’s important to be patient and persistent. With the right approach and evidence, you can effectively dispute a debt and resolve any issues.
How Madison Marcus Can Help You
Disputing a debt can be a complex process, but you should take action if you believe you have a valid dispute. Seeking assistance from experienced dispute resolution lawyers or litigation lawyers can help you navigate the legal system and protect your rights.
At Madison Marcus, our expert commercial litigation team has extensive experience in all state courts and tribunals, as well as all Commonwealth courts. We have helped numerous clients with a wide range of debtor and creditor disputes, including recovery of fees and commissions, disputes related to loans, mortgages, guarantees and financial contracts, and more.
Contact us today to learn more about how we can assist you with your dispute resolution needs.