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Disputing a debt

Disputing a debt

These questions and answers are for Western Australia only.

If you owe someone money you have a debt. You are the debtor and the person you owe money to is the creditor.

If your case goes to the Magistrates Court you will be called the defendant. The person who brings a claim against you is called the claimant. If your case goes to the District Court the person who brings the claim against you will be called the plaintiff.

I have got a letter demanding money from me. I am not sure I owe the money. What can I do?

You need to work out if you owe the money demanded. To work this out in some cases you may need more information from the person, business or authority (the creditor). In some cases you can ask for more information, eg a detailed account of fees and charges, or a copy of the contract if there is one.

It is best to put requests in writing. Keep a copy of your request.

Sometimes you may need legal advice about whether you owe the debt.

It is an old debt. Could time limits apply for collecting the debt from me?

Yes. Get legal advice.

What if the amount sought is not correct? Can I dispute it?

If the amount is not correct you should talk about it with the creditor. If the creditor agrees that you are right, write them a letter when you make the payment saying out that you both agree this is the correct amount. Keep a copy. If you can't agree on the amount get legal advice.

I think I have already sorted out the debt. What can I do?

You should talk about it with the creditor. If the creditor agrees that you are right, write them a letter saying out that you both agree you have settled the debt. Keep a copy. If they don't agree, get legal advice as soon as possible.

I think someone else owes the money not me. What can I do?

Again talk about it with the creditor. If the creditor agrees with you, write them a letter saying that you both agree the other person owes the money. Keep a copy. If they don't agree get legal advice as soon as possible.

What if I have good reason to not pay the debt?

You should talk about it with the creditor. If the creditor agrees with you, write them a letter saying out that you both agree you do not owe the debt. Keep a copy. If the creditor does not agree, get legal advice as soon as possible on whether you have a legal defence to not pay the debt.

What if the amount they want is correct?

Check that the creditor has not run out of time to chase you for the debt.

If you are sure that the amount is correct and the demand is within time, you should work out how you can pay the debt. If you can't pay it in full you should work out how much you can afford to pay each week/fortnight/month.

For more information on making a plan to repay debts go to When you can't pay your bills. Contact the creditor, and make an offer to pay the debt, according to what you know you can afford and when you can start. It is best to do this in writing even if you have discussed the offer first. You should date your letter and keep a copy for yourself. A financial counsellor may be able to help you respond.

If the creditor accepts your offer of repayment, you should again write to them confirming the arrangement. Keep a copy.

Start making the payments you have agreed on.

I entered into an agreement to repay a debt but now I can't meet the repayments. What can I do?

You could:

  • Contact the creditor and try to reach another agreement to repay the debt, eg by getting more time to pay or agreeing on a smaller amount to be paid in each instalment.
  • Contact a financial counsellor for help on how to organise your income to meet the repayments or to make another plan for payment to take to the creditor.
  • Get legal advice.

If you do nothing or do not come up with a satisfactory offer, the creditor may take you to court to get the money. If they are successful in their action it is likely that legal fees will be added to the original amount.

I have received a claim for the Magistrates Court saying I owe money. What should I do?

Read the document carefully and work out how much time you have to respond.

Get legal advice quickly.

For more information on what to do go to When you are served with a claim and Time limit for lodging a response to a claim.

If you do not respond the creditor can apply to the court for a decision against you. For more information go to Getting judgment without a trial.

Can I still negotiate with the creditor?

Yes. For more information on what to do go to When you are served with a claim.

I have received paperwork which says I have to go to court for a means inquiry but I don't owe the money. What can I do?

Get legal advice. You should not ignore the summons to go to court.

A means inquiry is part of the enforcement process. This means an order has already been made against you that you owe money to the creditor.

You can go to the court registry and ask to see the court file so that you can work out when an order was made against you and why.

In some cases you can get the court order (judgment) set aside. Before you apply to the court to do this get legal advice.

What if I don't go to the means inquiry?

For more information on what can happen if you don't go to a means inquiry go to If a judgment is made against you- enforcement process.

A debt collector has contacted me about a debt. What are my rights?

For information about dealing with debt collectors see the Australian Competition and Consumer Commission (ACCC) - Australian Securities and Investments Commission (ASIC) publication Debt Collection Guideline: for collectors and creditors which can be downloaded at the ASIC website. The ACCC and ASIC have jointly produced a consumer booklet , Dealing with debt collectors: your rights and responsibilities. It includes information if you are disputing a debt, or you are having trouble paying your debts, and a sample letter to help with making a complaint about debtor harassment. 

Where can I get more information?

Last reviewed: 28/01/2015

Last modified:

Disclaimer

The information displayed on this page is provided for information purposes only and does not constitute legal advice. If you have a legal problem, you should see a lawyer. Legal Aid Western Australia aims to provide information that is accurate, however does not accept responsibility for any errors or omissions in the information provided on this page or incorporated into it by reference.