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I owe money

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Money and debt problems can be confusing and frightening if you don’t know your rights.

If you owe someone money, you are known as a debtor and the person or organisation you owe money to is a creditor.

If you owe someone money and can’t afford to make repayments, you should get help as soon as possible. You can contact a financial counselling service and get legal advice about your options.  You may be eligible for financial hardship options.

If you owe someone money and you don’t pay, they may be able to seize your property (if it’s a secured debt) or take you to court to get you to pay. There are several ways a court can enforce the payment of a debt.

If someone has started legal proceedings against you to recover a debt or is threatening to seize your property, get legal advice immediately.

If someone is claiming that you owe them money, but you don’t agree—get legal advice.

There are time limits for collecting debts. If someone asks you to pay an old debt, get legal advice about your options.

If you owe money that you can’t afford to repay, you should see a financial counsellor and get legal advice. 

If someone has started court proceedings against you to recover a debt or is threatening to seize your property, get legal advice immediately.

Debt and your rights

There are laws about what someone can and can’t do to recover a debt.

They can’t:

  • send you to jail
  • take and sell any property without a court order (unless they have a mortgage or other form of security over the property)
  • threaten, intimidate or harass you or your family and friends
  • have your children taken from you
  • turn up at your home unless it’s at a reasonable time (usually between 7.30am and 9pm)
  • chase you for money after a certain amount of time has passed (there are time limits or debt recovery). 

They can:

  • write to you or call you to demand payment (at a reasonable time)
  • take you to court  to recovery the money
  • ask the court to enforce payment of a debt (if they have a court order)
  • sell your debt to a debt collector
  • take and sell any property they have a mortgage or other form of security over.

If someone has started court proceedings against you to recover a debt or is threatening to seize your property get immediate legal advice.

Getting help with debt

If you owe money and you can’t afford to pay, you should get help as soon as possible.

As well as getting legal advice, a financial counselling service can help you with prioritising bills, accessing emergency relief, budgeting and negotiating payment plans or hardship relief.

If you have many creditors and owe a lot of money, a financial counselling service can help you work out if bankruptcy is a good option in your situation.

For more information contact the Australian Financial Security Authority (AFSA).

Ombudsman services

You may also be able to get help from an Ombudsman service.

Ombudsman services can investigate unfair lending practices. These services are free to use, independent of industry and can force a creditor to comply with their directions.

Different Ombudsman services exist for different products such as:

The financial services ombudsman schemes (Financial Ombudsman Service and the Credit Ombudsman Service) have the power to stop legal proceedings before a judgment has been obtained to ensure that a proposal for hardship relief has been properly considered. You should get legal advice before lodging a dispute with a financial services ombudsman scheme.

For more information, contact the relevant Ombudsman.

Joint debts

When you borrow money with someone else, if the debt is in both names, it’s a joint debt.

Usually when a loan is in both names, the debtors are jointly and severally liable—this means the creditor can chase one of you or both of you for the whole amount. If neither of you pay, then they can take one of you or both of you to court to recover their money.

If you’re working and the other person isn’t, or the creditor has your address but not the other person’s, the creditor might only chase you.

Partner’s debts

You’re not usually liable for debts that are in your partner’s name only. You’ll only be liable if you were a joint debtor or if you gave a guarantee .

Find out more about dividing your property and debts after a relationship has ended.

Going to court —being sued

If you owe a debt and you can’t reach an agreement with the creditor about payment, the creditor can apply to a court or tribunal for an order saying that you owe the money.

Creditors can start legal proceedings against you in the:

It may be possible to stop the court proceedings by lodging a dispute with one of the financial ombudsman schemes (Financial Ombudsman Service or Credit Ombudsman Service) if the matter is about consumer credit. Generally, you’ll have 28 days to access an ombudsman scheme once you receive court papers or QCAT papers. If you don’t take action in this time, the creditor can ask the court to enter a judgment (money order) against you saying that you owe the money. Get legal advice immediately.

You can try negotiating with the creditor after legal proceedings have been started. Sometimes the creditor will agree to a new arrangement and agree to put court proceedings on hold while you are paying back debts under this new arrangement. You should get the creditor to give you a promise in writing not to continue court action while you are paying if you reach a new agreement. Get legal advice. 

It’s not a good idea to give the creditor permission to request a court judgment (money order) as a condition of a repayment arrangement. Get legal advice.                                                                                                                                               

QCAT procedures

If the creditor has applied to QCAT, they must serve you with an Application for minor civil dispute – minor debt (PDF, 291KB). You must respond to this application within 28 days after you are given a copy of the application.

If you don’t agree that you owe the money, or if you agree you owe some money but not the amount the creditor says you owe, you’ll need to file a Response to minor civil dispute – minor debt (PDF, 416KB). Get legal advice.

If you know you owe the money, it’s not usually a good idea to file a response as it will probably end up costing you more money in the long run. Even if you know you owe the money, you should still get legal advice about your rights.

If you don’t respond, the creditor may apply to the tribunal for a judg ment (called a default judgment) by lodging a Request for decision by default – minor civil dispute – minor debt (PDF, 340KB) and the tribunal can make an order saying that you owe the money (money order). You can apply to have a default decision set aside by lodging a Form 55 – Application to set aside or amend a default (PDF, 266KB). You should get legal advice immediately if you want a default decision to be set aside.

If you file a response, the matter will be referred to mediation, unless the amount in dispute is $1500 or less, or the tribunal orders otherwise. If the amount in dispute is $1500 or less, the matter will go straight to a hearing.The aim of mediation is to get all parties to reach an agreement. If no agreement is reached at mediation, generally the matter will proceed to a hearing and a final decision will be made.

If the tribunal agrees that you owe the money, they will make an order for you to pay (called a money order).

Visit QCAT’s website for information about

Court procedures

If the creditor applies to the Magistrates Court, District Court or the Supreme Court, they must serve you with a Claim (.DOC, 48KB) and Statement of Claim (.DOC, 40KB). You must respond to this application within 28 days after you are given a copy of the application.

If you don’t agree that you owe the money, or if you agree you owe some money, but not the amount the creditor says you owe, you’ll need to file a Form 17 – Defence (.DOC, 43KB).

If you know you owe the money, it’s not usually a good idea to file a defence as it will probably end up costing you more in the long run. Even if you know you owe the money, you should still get legal advice.

If you don’t respond, the creditor may apply to the tribunal for a judgment (called a default judgment) by filing a Form 25 – Request for default judgment (.DOC, 31KB) and the court can make an order saying that you owe the money (money order).

If you file a defence, the matter will go to a hearing and a final decision will be made. If the court agrees that you owe the money, they will make an order for you to pay (called a money order). You may also be liable for the other party’s legal costs.

Visit the Queensland Courts’ website for information on the application process for money disputes for people who are representing themselves, including forms you will need if you want to respond to a claim.

How to find out if a money order has been made against you

If you know which court and which registry (eg Rockhampton District Court) you can find out if a money order has been made against you by:

If a money order has been made against you, it will show up in your credit report.

You can access your credit report for free. Be aware that if you request a copy of your credit report, your contact details will be updated on your credit file and will then be available to any creditor who wants to check your credit report.

Enforcing of a money order 

QCAT has information on how a creditor can enforce a QCAT decision, including how to enforce a minor civil dispute decision.

The Queensland courts also provide information on how a creditor can get money after judgment.

Once a money order is made by a court or QCAT, a creditor can apply to the court to enforce the money order.

They can apply to the court:

  • for an enforcement hearing summons
  • for an enforcement warrant to redirect earnings or debt
  • for an enforcement warrant for seizure and sale of property
  • for a warrant for order to pay by installments
  • to make you bankrupt.

Enforcement hearing summons 

The creditor can make you go to court to answer questions about your financial position (eg if you own property or have other debts). This is called an enforcement hearing summons. It can help the creditor decide whether you own anything and whether it’s worth pursuing you for the debt.

You’ll be served with a summons to go to court for the enforcement hearing. If you don’t go, the court can issue a warrant to arrest you and bring you to court for the hearing, unless the creditor says you don’t have to attend because they are satisfied with the information you have given them before the hearing date.

If you attend court, you can agree to weekly or fortnightly payments and the court can order this.

If you’ve been served with an enforcement hearing summons, get legal advice.

Enforcement warrant to redirect earnings or debt

If you have a job or have money in the bank, the creditor can apply for a warrant to redirect earnings or debt. This allows the creditor to get money from your employer, bank account or from someone else who owes you money.

If your only income is from Centrelink, the creditor can’t get this type of warrant.

Enforcement warrant for seizure and sale of property

If you own property, the creditor may apply for an enforcement warrant for seizure and sale of property.  This allows the creditor to sell things that you own to pay back the debt.
The property must belong entirely to you. If you and your partner jointly own property, then this warrant won’t work.

There are some types of property which are protected from these types of warrants (called essential property). These are the same assets that you may keep if you go bankrupt.

Warrant for order to pay by installments

You or your creditor can apply to the court for a warrant for the debt to be paid by installments  over time because you can’t afford to pay it all back at once.

The court will look at your financial situation to decide whether the repayment proposal is reasonable.

If the court agrees, the creditor can’t take any other action to get the debt paid.

You should get legal advice. 

Bankruptcy

If the debt is over $5000, then the creditor can take steps to bankrupt  you. This is more expensive for the creditor than the other options. You should get legal advice.

Find out more about bankruptcy.

What to do if a money order has been made

Once a money order has been made against you, there are still things you can do to resolve the matter.

You can:

  • negotiate a repayment arrangement with the creditor
  • apply for a warrant for payment of debt by instalments
  • declare bankruptcy voluntarily.

Negotiate a repayment arrangement

If you can repay the debt by installments after the money order has been made, you can negotiate with the creditor about what amount of money can be paid. You should get help from a financial counselling service and get legal advice before negotiating a repayment arrangement.

Apply for a warrant for payment of debt by installments

You can apply for a warrant for payment of debt by installments. If you make a reasonable offer of repayments and the creditor won’t agree, you can apply to the court to order the repayment of the debt by installments. If the court agrees, the creditor can’t take any other action to recover the debt.

Voluntary bankruptcy
In some situations, it might be a good idea to become bankrupt. Bankruptcy gives you a legal right to protection from your creditors. 

You should get legal advice before deciding to go bankrupt. There are some serious consequences of bankruptcy and not all debts are cancelled by declaring bankruptcy.

Debt collectors

A debt collector is someone who collects debts on behalf of a business. This could be:

  • a representative of a creditor, or
  • an independent debt collection agency.

The Australian Competition and Consumer Commission and the Australian Securities and Investments Commission have published a Debt collection guideline for collectors and creditors.

Debt collectors must be licensed and have to comply with debt collection guidelines.
A debt collector must not:

  • use physical force or coercion
  • harass you unreasonably
  • try to mislead or deceive you
  • take unfair advantage of any vulnerability (eg disability).

If you think a debt collector is acting unfairly or isn’t complying with the debt collection guidelines, you can make a complaint to the Australian Competition and Consumer Commission or the Australian Securities and Investments Commission.

If you’re being harassed by a debt collector, you should get legal advice.

The Australian Competition and Consumer Commission have information about dealing with debt collectors.

Related resources:

  Debt collection guideline for collectors and creditors (ACCC and ASIC)

  Dealing with debt collectors (ACCC).

Time limits

There are time limits for the recovery of debt. If someone is chasing you for an old debt, you should find out if a money order   has been made against you, and if it has, find out the date it was made.

If it’s been more than 6 years since you first owed the debt, you should get legal advice about whether the creditor can still enforce the debt against you.

Do I need legal advice?

You may need legal advice if you:

  • are struggling to pay a loan and there is a mortgage over your home
  • have notice that your creditor is going to repossess your home or another asset
  • need help negotiating with your creditor
  • receive a summons or other papers from a court or QCAT
  • want to know about asking the court for an order to pay by instalments
  • are considering bankruptcy because you can’t pay your debts
  • think an order has been made against you.

How to get legal advice

We don’t give advice on business debts or disputes about business partnerships, or debt-related court proceedings outside of Queensland.

We may give legal advice to people who have a debt in Queensland. 

Our Consumer Protection Unit can give specialist legal advice and help with disputes with credit providers and insurers.

The following services may also be able to give legal advice:

Caxton Legal Centre Consumer Law Service gives free specialist legal advice to people with consumer and consumer credit legal problems, including loans, bankruptcy, debt collection, mortgage brokers and financial advisors.

Gladstone Community Advisory Service gives free legal advice about consumer matters.

Cairns Community Legal Centre - Consumer Law Service gives legal help in the areas of consumer credit matters, consumer product disputes, consumer service disputes, consumer debt matters, bankruptcy and other consumer law matters for socially and financially disadvantaged members of the community.

LawRight Self Representation Service (Federal) gives legal advice and help to people involved in civil proceedings in the Federal Circuit Court or Federal Court for matters involving bankruptcy and consumer law. The service may also help with drafting documents and correspondence relating to your legal matter. They don’t provide representation.

LawRight Self Representation services (State courts) gives free legal advice and help to people who are involved in civil proceedings before the Brisbane District Court, Brisbane Supreme Court or Queensland Court of Appeal. The service may also help with drafting documents and correspondence relating to your legal matter. They don’t provide representation.

LawRight Refugee Civil Law Clinic gives free legal advice and help to refugees, humanitarian entrants, asylum seekers and temporary protection visa holders, including advice about debts, loan agreements and bankruptcy.

LawRight Mental Health Law Clinic gives legal advice on civil law issues arising as a result of a person's mental health problem, including credit or debt law issues.

LawRight – Representation service – Debt enforcement hearings service may be able to give one-off legal representation to debtors who are attending an enforcement hearing in the Brisbane Magistrates Court. 

Students Legal Service - University of Queensland gives free legal advice to students of UQ, including advice about consumer matters and responding to letters of demand.

National Legal Aid can refer you to Legal Aid in other states if your debt or court proceedings are in another state.

Queensland Law Society can refer you to a specialist private lawyer for advice or representation.

Who else can help?

These organisations may also help. They don’t give legal advice.

Financial Ombudsman Service gives independent dispute resolution for unresolved complaints about financial services providers and credit reporting agencies.

Credit Ombudsman Service (COSL) is an independent dispute resolution scheme that helps resolve complaints between consumers and financial services providers who are participants of the scheme. Participants of the scheme include non-bank lenders, finance brokers, credit unions, building societies, debt collection firms, financial planners, trustees, servers, aggregators, mortgage managers etc.

The Australian Competition and Consumer Commission (ACCC) have information about:

The ACCC and ASIC produce a publication about your rights and responsibilities when you owe a debt, called Dealing with debt collectors: your rights and responsibilities.

ASIC's MoneySmart website - ASIC may be able to help with disputes about financial products and services.

The MoneySmart website gives independent guidance for consumers making decisions about their personal finances, including information about:

Australian Financial Security Authority (AFSA) gives information about bankruptcy, including how to become bankrupt, making a person bankrupt, what debts are covered, consequences of bankruptcy and more.

Office of Fair Trading (OFT) – gives information and help to the public on a wide range of consumer related issues, including:

Office of the Australian Information Commissioner handles complaints about misuse of personal information and inaccurate credit reports.

Queensland Civil and Administrative Tribunal (QCAT) can hear:

You should try and first resolve your dispute with the other party before asking the QCAT to hear your dispute.

The following Australian credit reporting agencies can provide you with a free copy of your credit history:

Energy and Water Ombudsman offers a free service to help resolve disputes with electricity, gas or water suppliers.

Telecommunications Industry Ombudsman (TIO) provides free alternative dispute resolution scheme for unresolved complaints about telephone or internet services.

Related Links & Information
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