- Do you know your options for when someone owes you money?
- When can a debt collector contact a debtor?
- If you have a debt, do you know about resources and support that can help?
When you buy or sell products or services, sometimes payment is not immediate, and the buyer owes a debt to the seller. If your small business has a debt or is owed, there are rules under the law.
Chasing debts owed to you
People who owe money are commonly referred to as debtors. Debtors, and others connected to a debt, should be treated with fairness, respect and courtesy.
Businesses can use debt collectors to chase debts owed to them. There are some rules for debt collection:
- a debt collector should only contact a debtor for a reasonable purpose and only when necessary
- debt collectors must follow the law and not do certain things like use physical force, coercion or harassment.
It may be necessary and reasonable for you to contact a debtor in some cases to tell them how much money is owed and ask for payment. However, what is considered reasonable may change according to the characteristics of the debtor. For example, if you are aware that a debtor is unable to make meaningful and sustainable repayments, continuing to contact the debtor to demand payment will not be considered reasonable. There are also specific times in which a debtor should be contacted.
Learn more about debt collection.
Paying debt you owe
If you owe money, debt collectors generally have a right to seek repayment. There are laws to protect you from being treated unfairly by debt collectors.
If you are struggling with debt, there are free services that can help you, including:
- has financial counsellors
- has financial counselling for small business owners
- 础厂滨颁鈥檚 has information about consolidating debt
- Ombudsman dispute resolution for different industries.
Bankruptcy can be a last resort for a debt crisis.
Watch our video on how to deal with debt collection
People get into financial difficulties for many reasons, and often at the worst of times. Being in debt can be stressful, which can be made more daunting when a debt collector becomes involved. However, you have a number of rights and responsibilities when dealing with the debt collection process. Knowing your legal rights around what debt collectors can and can't do, and what to do if you're disputing a debt will put you in a stronger position if debt collectors contact you. For example, if you are having trouble paying a debt, you have the right to negotiate a repayment plan that you can afford.
You also have the right to dispute a debt if you disagree with the amount being claimed, or you believe you don't owe the debt. Although you are responsible for repaying your debts, debt collectors do not have the right to harass you or make false claims about your situation. If you do need help dealing with debt collectors, there are a number of free services that you can access: financial counsellors can help you with your budget and negotiate a payment plan, and community lawyers can advise you, and act on your behalf when needed.
You don't need to let debt overwhelm you, so to find out more about your rights, and where to get help, check out our new guide on dealing with debt collectors.
Learn more about getting help with a debt.