How Long Can Debt Collectors Chase You in Australia? A Comprehensive Guide

This factsheet only applies to debts from NSW. Other states and territories have their own laws about how long a debt can be collected. This fact sheet is for information only. You should get legal or financial counselling advice about your personal situation.

Debt collectors in Australia can chase you for a maximum of six years (or three years in the Northern Territory) for most debts. This time limit is known as the statute of limitations. After this period, the debt becomes statute-barred, meaning the creditor can no longer take legal action to recover the debt

However there are some exceptions to this rule. For example the statute of limitations does not apply to debts secured by a mortgage over real property (such as a home loan or a car loan). Additionally, the statute of limitations can be reset if you acknowledge the debt in writing or make a payment on the debt.

If you are being chased by a debt collector for an old debt, it is important to know your rights. You may not have to pay the debt if it is statute-barred. You should also be aware of the tactics that debt collectors can and cannot use to collect debts.

In this guide we will answer the following questions:

How long can debt collectors chase you in Australia?
What is the statute of limitations for debt in Australia?
What are the exceptions to the statute of limitations?
What are my rights if I am being chased by a debt collector for an old debt?
What tactics can debt collectors use to collect debts?
What tactics can’t debt collectors use to collect debts?
What should I do if I am being harassed by a debt collector?

What is a Debt Collector?

A debt collector is a person or organization that collects debts on behalf of creditors. Creditors are the people or organizations to whom you owe money. Debt collectors can be either internal or external. Internal debt collectors are employed by the creditor, while external debt collectors are independent companies that are hired by the creditor to collect the debt.

Debt collectors can contact you by phone, email, letter, or in person. They can also contact your family and friends to try to collect the debt. However, there are limits to what debt collectors can do. They cannot harass you, threaten you, or use unfair tactics to collect the debt.

What is the Statute of Limitations for Debt in Australia?

In Australia, the debt statute of limitations is six years (three years in the Northern Territory). This implies that the creditor has three years, or six years, from the date you: to take legal action to recoup the debt.

Last made a payment on the debt
Acknowledged the debt in writing
Had a court judgment entered against you for the debt

The debt becomes statute barred if the creditor does not start legal action within this time frame. In other words, the creditor is no longer able to pursue legal action to recoup the debt.

What are the Exceptions to the Statute of Limitations?

The Australian statute of limitations for debt has a few exceptions. These exceptions include:

Debts secured by a mortgage over real property (such as a home loan or a car loan). There is no statute of limitations for these debts.
Debts owed to the government. There is no statute of limitations for these debts.
Debts that have been acknowledged in writing. If you acknowledge the debt in writing, the statute of limitations will start again from the date of the acknowledgment.
Debts that have had a court judgment entered against you. If a court judgment has been entered against you, the creditor can enforce the judgment for up to 12 years (or 15 years in South Australia and Victoria).

What are my Rights if I am Being Chased by a Debt Collector for an Old Debt?

If you are being chased by a debt collector for an old debt, you have a number of rights. These rights include:

The right to be treated fairly and with respect. Debt collectors cannot harass you, threaten you, or use unfair tactics to collect the debt.
The right to know the name of the creditor and the amount of the debt. Debt collectors must provide you with this information in writing.
The right to dispute the debt. If you believe that the debt is not yours or that you do not owe the full amount, you can dispute the debt with the debt collector.
The right to negotiate a payment plan. If you cannot afford to pay the full amount of the debt, you can negotiate a payment plan with the debt collector.
The right to seek legal advice. If you are unsure about your rights or if you are being harassed by a debt collector, you can seek legal advice.

What Tactics Can Debt Collectors Use to Collect Debts?

Debt collectors can use a variety of tactics to collect debts. These tactics include:

Contacting you by phone, email, letter, or in person.
Contacting your family and friends to try to collect the debt.
Sending you letters that demand payment of the debt.
Negotiating a payment plan with you.
Taking legal action to recover the debt.

What Tactics Can’t Debt Collectors Use to Collect Debts?

Debt collectors cannot use a number of tactics to collect debts. These tactics include:

Harassing you. This includes calling you repeatedly, sending you threatening letters, or visiting your home or workplace uninvited.
Threatening you. This includes threatening to arrest you, deport you, or take your children away from you.
Using unfair tactics. This includes lying to you about the debt, adding illegal fees or charges to the debt, or threatening to damage your credit rating.

What Should I Do if I am Being Harassed by a Debt Collector?

If you are being harassed by a debt collector, you should:

Keep a record of all contact with the debt collector. This includes the date, time, and nature of the contact.
Report the harassment to the Australian Securities and Investments Commission (ASIC). You can do this online or by calling 1300 300 630.
Seek legal advice. A lawyer can help you to understand your rights and to take action against the debt collector.

Debt collectors in Australia can chase you for a maximum of six years (or three years in the Northern Territory) for most debts. After this time period, the debt becomes statute-barred, meaning the creditor can no longer take legal action to recover the debt. However, there are some exceptions to this rule.

If you are being harassed by a debt collector, you should report the harassment to ASIC and seek legal advice.

In this fact sheet:

In NSW, a lender or debt collector must file a lawsuit for an unsecured debt (such as credit card, personal, or payday loan) no later than six years from the following

the date that you first missed a payment or received a default notice, which gives the lender or debt collector the legal right to sue you.
the date of your last payment
the date on which you formally acknowledged the debt (you can do this by requesting an account statement or repayment plan for “your” debt, for example).

Certain debts have a 12-year statute of limitations before the lender or debt collector can file a lawsuit. These debts include:

Mortgages (loans for a house or automobile, or other loans secured by a piece of property) They have six years from the date the court action began to recover the principal amount borrowed, but they have twelve years to recover interest.
Deeds (commonly used for mortgages or guarantees).

If someone says you owe them money from a long time ago, ask for information

You can ask the lender or debt collector to give you:

copies of the original contract
copies of account statements
copies of any demand letters or court documents
copies of any written acknowledgements they are relying on.

Use the term “alleged debt” in your correspondence with the lender or debt collector to avoid acknowledging the debt and resuming the six-year period. Request that they halt all legal action for a period of 28 days so that you can get and review the information. You could use this sample letter about old debts to a debt collector.

The lender or debt collector has at least 12 years from the date of the judgment to collect the money if you discover that they have a court judgment against you. Read our fact sheet about processes in the NSW Local Court.

You can file a dispute with the lender or debt collector once you are certain the debt has already been barred by statute in order to obtain written confirmation that you are not required to pay (be sure to save the confirmation securely). However, you might need to consider how you can settle the debt if you turn out to be mistaken.

You should exercise caution if you are unsure or if the six or twelve years are almost upon you. Doing nothing and waiting for the lender or debt collector to have more time to collect the debt can be dangerous. Statute barred debts are fairly rare. Large lenders and debt collectors will probably have systems in place to notify them when debts are about to become statute barred, if not all of them. In addition to interest and fees, if you do nothing and the lender takes legal action in a timely manner, they may also add court and legal costs to the debt.

DO NOT Pay Debt Collectors | How to Handle Debt When It’s Gone to Collections

FAQ

What happens if you ignore debt collectors Australia?

The people you owe money to (your creditors) have a right to get it back. But it’s not okay to harass or bully you. If you receive a notice about being taken to court, get free legal advice straight away. If you ignore it, you risk your goods being repossessed and sold.

Can Australian debt collectors chase you overseas?

Technically speaking, Australian debt collectors cannot literally follow you overseas. But as you just learnt, they have many options. They may try to contact you personally, outsource the job to an international debt collector, or seek help from local and foreign governments.

What happens if you don’t pay your debt in Australia?

If you don’t pay your debts, you may receive a notice to appear in court (such as a summons, statement of claim or liquidated claim). Creditors may take this step to try and recover the money owed to them.

How does debt collection work in Australia?

Traditionally, a debt collection service will send a ‘letter of demand’ to the debtor on its letterhead, demanding that the debt is paid by a particular date or legal action may be taken. If necessary, the service will issue a second, ‘final’ letter of demand or follow up with a ‘phone demand’.

How long can you be chased for a debt in Australia?

Have you ever wondered how long you can be chased for a debt or how long you have to recover your unpaid debts? In most states in Australia, the limitation period for debts is for six (6) years, except in Northern Territory where it is for three (3) years. This means that the creditor can pursue the debt from six (6) years from the date of when:

How long can a creditor Chase a debt?

According to Rostron Carlyle Rojas Lawyers partner Paul Rojas, the standard limitation period for debts is six years as per the Limitation of Actions Act 1974 (QLD). That is, a debt collector or creditor can chase a debt from six years starting from the following dates: the last date on which the debtor made a payment in relation to the debt

How long can a debt be chased in Queensland?

If you have ever asked how long can a debt be chased in Queensland, the limitation period for the recovery of a debt is six (6) years unless legal action has been commenced. Section 10 of the Limitation of Actions Act 1974 (QLD) says:

What is the ACCC & ASIC debt collection guideline?

The ACCC and ASIC have jointly produced this guideline to assist creditors, collectors and debtors understand their rights and obligations. It helps make sure that debt collection activity is consistent with consumer protection laws. This guide helps people who are currently dealing with debt problems, or being contacted by debt collectors.