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Understanding Your Rights When a Debt Collector Calls

Understanding Your Rights When a Debt Collector CallsIf your debts are turning bad, understanding your rights and obligations and your options for arranging repayment is the best way to deal with the debt collector and make a plan for the future.  If you don’t believe you owe the money you need to dispute the debt immediately. Give your reasons in writing and provide copies of evidence. 

If you owe the money but can’t afford to pay, you should get professional advice on how to deal with the creditor and on budgeting so you can work out a manageable repayment arrangement. If you don’t pay or get behind on your payments, the item you bought on hire purchase or listed as security for the loan may be repossessed.

You only have to pay fees such as interest if you knew about them and agreed to do so when you entered into the contract. However, a creditor can also take you to Court and if they’re successful you might be ordered to pay costs.

When making repayments, don’t just pay the creditor directly without checking – you may owe the debt collector and not the creditor. Debt collection letters should include instructions on who to pay.

Each credit reference agency keeps a database which may contain different information about you. Under the Privacy Act, you have the right to obtain a free copy of your personal credit record. If a credit reference agency has entered the wrong information about you, you have the right to ask for it to be changed.

It’s also important to know that under the Fair Trading Act, it’s unlawful to use harassment, coercion, and physical violence to collect debts. Overall however it’s better not to wait for the debt collectors to get involved – be proactive about getting on top of your debt.


Dave Manville

All stories by: Dave Manville

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