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When you can't pay your bills

When you can't pay your bills

If you can't pay your bills, it is important to do something about it as soon as possible.


If you cannot pay utilities bills due to financial hardship see the heading below What if I am having problems paying my utilities bills?

Where do I start?

1. Work out what you owe.

  • Work out what you owe and who you owe it to.
  • Write down your income after tax, either weekly, fortnightly or monthly.
  • Work out your costs over that same time. Include regular bills such as electricity, gas and telephone or mobile phone.
  • Write down all the unpaid bills. Include all your debts and potential debts, eg if you have a credit card, what will be payable on it next month.
  • Write down what assets or things of value you have, such as a house, car, investments and superannuation entitlements. You may need to get advice on which assets to try to keep, or which could be sold to pay your debts.

2. Make a plan

If you cannot pay all the bills when they are due, what if you had more time? If you think you could pay them if you were given more time, try to work out a sensible plan to put to the people you owe money.

Need help to make a plan? See a free financial counsellor.

If you need assistance, a financial counsellor may be able to help. Financial counsellors are skilled community workers who provide information and support to people experiencing financial problems.

For information about free counsellors, you can call the Financial Counsellors' Association of WA on (08) 9325 1617.

A financial counsellor may be able to:

  • inform you about your options
  • provide information about some consumer problems
  • give appropriate referrals to other agencies
  • help you organise your debts
  • help you prepare an income and expenditure statement
  • advocate for you with the creditor/s
  • help you negotiate with your creditor/s
  • write a letter of negotiation to the creditor/s
  • help you respond to a letter of demand from the creditor/s
  • help you respond to a means inquiry application
  • inform you about debt recovery options
  • inform you about bankruptcy
  • inform you about any financial assistance programs you may be eligible for
  • support you through a bill paying service.

Seek legal advice first if you are considering bankruptcy. Bankruptcy is a serious step with long term consequences. There may be other options for you to consider.

What if I receive a letter of demand?

  • This is a letter asking you to pay a debt. It is not a court document.
  • Check that the amount of money demanded is the amount you owe. You can do this by asking the person, business or authority (the "creditor") that you owe money to give you a detailed account. You can check this to make sure the amount is correct.

  • If the amount is not correct you should discuss this 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.

  • Once you are sure that the amount is correct 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. Follow steps one and two as outlined above.

  • A financial counsellor can help you calculate what you can afford to offer to repay your debts. It is very important that you make an offer that you can afford to keep.

  • Then contact the creditor, and make an offer to pay the debt, according to what you know 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.

What if the creditor does not accept my offer?

The creditor does not have to accept your offer to repay. They can choose to take legal action against you. If they are successful in their legal action it is likely that legal fees will be added to the original amount owing.

Why would creditors take me to court?

If you are in debt, creditors may feel the only way to get their money is to take you to court. They can try to get a court judgment stating that you owe them the money. Creditors have to do this within a certain time (usually six years). Otherwise you may have a complete defence to any action they take to get the money. (The debt becomes 'statute barred').

Once creditors have judgment, they have a range of ways to get you to pay. This is known as enforcement. Get legal advice.

How does a creditor take me to court?

If your debt is under $75,000 and you cannot pay, the creditor will serve a claim lodged in the Magistrates Court on you. Get legal advice.

What if I get a court document?

If your case is in the Magistrates Court a form called 'Response to general procedure claim' or 'Response to minor case claim' should be attached to the claim. There are time limits for you to respond. Get legal advice. If you do not put in a response in time, the creditor can apply to get automatic judgment against you. This is known as default judgment.

For more information, see Time limits to respond to a claim and When you are served with a claim.

What if I am having problems paying my utilities bills?

If you are having trouble paying your utilities bills (gas, water, or electricity) due to financial hardship contact your provider.

You may be able to get assistance from  the WA Government Hardship Utilities Grant Scheme (HUGS). More information about this is available at the Department of Communities Child Protection and Family Support  website.

Where can I get information about government concessions, rebates and payments?

Go to the Concessions WA website to find out about a range of government concessions, rebates and payments to help you save money.

Where can I get more information?

  • Contact Legal Aid WA's Infoline on 1300 650 579.
  • Go to the ASIC MoneySmart website for hints on how to manage money better and useful links to other services.
  • Community Online Resource Essentials (CORE)   Mortgage stress- a self help guide has information on your options if you can't meet your mortgage repayments. Visit the CORE webpage today to find out more and register.
  • Contact the National Debt Helpline on 1800 007 007. It is a free confidential service for those with financial problems and queries or go to the Financial Counsellors' Association of WA website for information on where to find a financial counsellor.
  • Contact the Financial Information Service at Centrelink on 132 300 or go to its website. Payment Finder on this website is an online tool to see what payments are available in different circumstances and the eligibility basics for these payments.
  • The Australian Competition and Consumer Commission (ACCC) and Australian Securities and Investments Commission (ASIC) have jointly produced a consumer guide Dealing with debt: your rights and responsibilities which includes examples of letters you might need to send.
  • For more information on bankruptcy go to the Australian Financial Security Authority web site or go to Bankruptcy.
  • To help avoid money problems when buying a car see the My Car website. This website resource provides essential information for car buyers, whether buying privately, through a car dealership or at auction. Use this website to learn about your legal rights when buying a car and where to get help if something goes wrong. 
  • If you are homeless or at risk of homelessness in Perth you may find the City of Perth Homeless Services in the Inner City Directory useful. You can view this on the City of Perth website. Many community organisations will also have copies.

Last reviewed: 21/10/2016

Last modified:


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.