What Legal Action Can Debt Collectors Take?

What Legal Action Can Debt Collectors Take?

Owing money to a bank, lender or other creditor can be stressful. Your creditors always have a right to collect the money they’re owed, and they might contact you, repossess your property or refer the debt onto a debt collection agency.

Being contacted by debt collectors doesn’t need to be frightening. Collections agencies are always happy to help you work towards the best outcome for your situation. If you’re contacted by a debt collector then it’s a good idea to make sure you understand your rights. There are limits on how, when and why debt collectors can contact you, and they typically only take legal action in extreme circumstances. In this article we’ll discuss what legal action debt collectors can take, and what you can do if you experience misconduct.

What Legal Action Can Debt Collectors Take?

If you owe money to a creditor that you cannot repay, the creditor has the option to sell your debt to a debt collector. Debt collectors are allowed to:

  • Call you, write to you or visit your home to request payment (at reasonable times)
  • Negotiate a payment plan to help you repay some (or all) of your debt
  • Take you to court to recover the debt
  • Apply to the court to enforce payment of a debt
  • Sell property that they hold a mortgage or security over (such as your car or home)

If you do go to court, and the court rules that you owe money, a debt collector can obtain an order from the court allowing them to:

  • Compel you to provide details about your finances
  • Develop a repayment arrangement
  • Take and sell personal property (excluding assets that are protected in bankruptcy)
  • Take and sell real property (such as your home)
  • Garnish your wages
  • Take money from your bank account
  • Make you bankrupt (if you owe more than $10,000)

In most cases, debt collectors will try to avoid taking you to court. It’s typically more cost and time-effective for everyone involved if you can reach a repayment agreement privately.

Illegal Debt Collection Behaviour

Debt collectors are prevented from taking certain actions against a person or business that owes a debt. Debt collectors cannot:

  • Harass you over the phone, in writing or in person
  • Tell your family, friends or employer about your debts
  • Use abusive or threatening language
  • Intimidate you or threaten you with harm
  • Use physical force or coercion
  • Mislead you about the consequences of nonpayment
  • Send you to prison
  • Collect an unsecured debt that is more than 6 years old (3 years in the Northern Territory) without a court order

Australia’s debt collection industry is highly regulated. This protects you from dodgy practices, and it means there are typically multiple options available for repaying outstanding debts. When dealing with debt collectors it’s a good idea to keep a record of all contact. Save any written letters or emails you receive, and make a note of phone calls and face-to-face visits, as well as anything that was discussed.

You can report debt collector misconduct to ASIC or the ACCC.

When Can a Debt Collector Contact You?

Contacting you is the first port of call for a debt collector. If you’re contacted by a collection agency using skip tracing services, you’ll have the opportunity to discuss your debt, pay the money you owe, and/or develop a repayment plan.

It’s important to note that there are strict limits placed on how, when and why a debt collector can contact you. Debt collectors can only contact you to discuss your debt in the following ways:

Contact Method


Acceptable Times

Telephone (maximum of 3 calls per week, or 10 calls per month)


7.30am to 9pm


9am to 9pm



7.30am to 9pm


9am to 9pm

Workplace contact

Your normal working hours, or 9am to 5pm

A debt collector may also contact you via letter, email or social media. If a debt collector can’t reach you any other way, or if they are repossessing your property, they may also visit you at home (at a reasonable time). At-home visits shouldn’t be necessary if you can work out a repayment plan in writing or over the phone.

Recover Your Debts Legally and Ethically with Dynamic Commercial Collections

The debt collection industry often gets a bad rap. The truth is that modern debt consulting services agencies are closely regulated, and it encourages fair and equitable dealings. If you’re struggling to recover the money you’re owed, the team at Dynamic Commercial Collections can put together a plan that helps reach a better outcome for all parties involved.

Dynamic Commercial Collections works with individuals and corporate clients throughout Queensland and also offers debt collectors Perth services. We take a legal, ethical and professional approach to collections that allows us to offer the most comprehensive debt recovery services available. Contact us today if you need help recovering a debt or if you want to learn more about how we approach Field Services or debt collection.

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