Disputing a debt
Before taking court action, 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. Sometimes these notices or letters will add extra costs to the amount you owe.
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. You can find more information about where to get legal help on our webpage Get help with debt problems.
If you are or may become bankrupt, or your only income is Centrelink, you may not have to pay anything claimed.
This page has information on what to do if you are sent a letter of demand or debt notice and do not agree you owe the money or may have a good reason for not paying.
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 you may need more information from the person, business, or authority (the creditor). In some cases, you can ask for more information, for example, 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 (or send an email) when you make the payment saying out that you both agree this is the correct amount. Keep a copy of the letter or email. 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 (or send an email) saying out that you both agree you have settled the debt. Keep a copy of the letter or email. If they don't agree later, get legal advice as soon as possible.
I think someone else owes the money and not me. What can I do?
Again, talk about it with the creditor. If the creditor agrees with you, write them a letter (or send an email) saying that you both agree the other person owes the money. Keep a copy of the letter or email. If they don't agree later 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 (or send an email) saying out that you both agree you do not owe the debt. Keep a copy of the letter or email. If the creditor does not agree later, get legal advice as soon as possible.
More information
The Australian Competition and Consumer Commission website has more information on disputing a debt.
Reviewed: 17 April 2024