Disputing a debt

A creditor (or their lawyer or a debt collection agency) may send you a notice or a letter of demand if you owe a debt before taking further action. Sometimes these notices or letters will add extra costs. 

You have the right to dispute the debt but this should be done promptly and in a lawful way. You may need to check if you owe the money claimed, or if the debt is too old to be taken to court for.  Also if you are or may become bankrupt, or your only income is Centrelink you may not have to pay anything claimed.

Find out what you can do if you receive a letter of demand and:

  • you don’t think you owe the money
  • you don’t think the amount sought is correct
  • you think you have already sorted out the debt
  • you think someone else owes the money.

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

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.

Some letters of demand include claims for additional amounts of money above what you owe, referred to as fees or costs for recovering the debt.

You may not have to pay the extra costs if they are not included in the terms of the contract between you and the creditor. Get legal advice.

You have a right to dispute the debt or the amount of the debt.

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.

 

Reviewed: 11 April 2018

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.